Starting your own business is tough at any age. It’s even harder when you’re a teenager with no capital or credit score to get things started.
The Loudonville FFA Alumni and Supporters group wants to make that easier for FFA members at Loudonville-Perrysville Exempted Village Schools, in Ashland County, Ohio.
In FFA, students choose a Supervised Agricultural Experience, or SAE, to get real world hands-on experience in addition to classroom learning. Many of them do an ownership/entrepreneurship SAE by starting their own small business.
The Loudonville FFA Alumni and Supporters is launching the Youth Agricultural Micro-Loan Program for the Loudonville FFA to help students who need it get their business started. The group is working with Park National Bank, in Loudonville, to implement the program.
“Anytime groups of adults can collaborate together to help teens is a win for the present and a win for the future in that community,” said Kendra Carnegie, Loudonville FFA adviser. “I’m thrilled to know that this time the benefits will be for the FFA members for Loudonville FFA.”
A lot of students borrow from the bank of mom and dad, or use money from their own part time jobs, to start their ownership SAEs. That’s what Loudonville FFA alumnus, Kenny Libben, did.
“When I did them, we did market hogs. And my dad would buy them, and I’d pay him back when I sold them,” Libben said.
That’s not an option for some of the members Carnegie explained to the alumni group last year.
“We have the same problems every other small town in Ohio has had,” she told Farm and Dairy.
The Great Recession in 2008 hit the town hard, as did rural addiction issues. Students aren’t always living on the farm in a nuclear family anymore. About 33% of students in Loudonville-Perrysville Exempted Village Schools are considered economically disadvantaged, according to state data.
Nuts and bolts
In the new program, FFA members can borrow up to $500 and ask for up to a year to pay it back. There will be four repayment options. The interest rate on the micro-loans will be 5%.
“If they take out $500 and take a whole year to pay it back, it comes to $14,” Libben said. “We’re trying to make it look and feel official.”
Park National Bank is an educational partner for the program. It will provide participating students with an amortization schedule and deposit slips for their loans.
The bank also gave the program $1,000 in seed money to kick off the program.
The loan program is mostly about getting students the funds to participate in this school project, but it’s also about helping them learn how to manage their finances and giving them extra incentive to make their business work.
“We could’ve just given out money, but then you’re not learning anything from it,” Libben said.
Students will fill out a short loan application and include a basic business plan to outline why they need the money. Then they’ll be interviewed informally by the alumni group. Libben said it’ll be more like a discussion to make sure the student has thought everything through and have a good plan.
In Loudonville, many students work part time in the outdoor recreation industry that spills over from Mohican State Park. Libben said many people have been through the Loudonville area on a canoe trip in the park and not even realized it.
Carnegie said with a $500 loan, students could run their own sweet corn stand, relying on park tourists as customers in the summer. They could start a lawn mowing business. They could also raise small animals for the fair.
She hopes this loan program will inspire some students who might not have otherwise had the chance.
“Our quote of the week [in class] was ‘whenever you see a successful business, someone once made a courageous decision,’” Carnegie said.
Those who want to support the micro-loan program can make checks payable to Loudonville FFA Alumni, put Micro-Loan in the memo line, and send to Loudonville FFA Alumni and Supporters, P.O. Box 332, Loudonville OH 44842.
Anyone with questions can contact Libben by texting or leaving a message, at 419-651-8324, or emailing firstname.lastname@example.org.
(Reporter Rachel Wagoner can be contacted at 800-837-3419 or email@example.com.)
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