Mission lenders focus on climate resilience

Unnaturally strong storms this summer knocked out the power to thousands of homes and businesses, including a startup bakery in Muskegon that had just received one of its biggest orders of the year.

The freezer stopped. The refrigerator stopped. Even the oven wouldn’t work to try to cook some of the rapidly melting food. The business owner lost $3,000 overnight.
Small businesses using solar energy, battery storage, or generators stayed open, didn’t lose food, didn’t lose money.

“Solar technology and energy backup is increasingly affordable for small business owners,” said Elissa Sangalli, CEO of Northern Initiatives.  The Community Development Financial Institution is embarking on an ambitious climate lending program throughout the state. “To think that a small investment could have saved that food is heartbreaking.”

Northern Initiatives is building its climate lending program from the ground up, but not from scratch.

"We’re learning from CDFIs around the country – Maine, Kentucky, California, Colorado – who have existing climate-lending programs and adapting them for Michigan entrepreneurs.”

Last winter was a literal disaster and a wakeup call for many businesses that rely on seasonal traffic that disappears when there’s no snow.

"We need to help these entrepreneurs become resilient to the climate risks, but we also want to help them be responsible businesses that are building healthy communities,” Sangalli said.

Building a responsible business from the ground up is, again literally, what Luis Chen-Aguilera is doing with Wormie’s, his vermiculture compost farm.

“When you mix food waste in with plastics and metals at the landfill, it creates methane,” he explains. His goal is to take food waste out of that cycle - and go further. “We need to heal our soil. We have all the things we need to do that. I bring those things together.”

Luis Chen-Aguilera owns Wormie’s, a vermiculture compost farm.

Those things are food waste and worms. “Composting is basically recycling,” he says, “and the worms are really good at it.”

Wormie’s hosts a compost CSA, picking up food scraps from 800 residential customers and, on every fourth trip, dropping off a bag of the prettiest soil you’ve ever seen.

“My vegetable garden is thriving – need any zucchini?” laughed Jon Brown, a Grand Rapids videographer and owner of IfSo Studios. “We have a cute compost bin in the kitchen that we empty into the five-gallon Wormie’s bucket whenever it’s full. Then we leave the Wormie’s bucket on the porch every Thursday.”

A recent partnership with Kent County offered six months of free Wormie’s services and 200 households signed up. “They’ll get in the habit. They’ll stick around,” said Chen-Aguilera.

Jennifer Saltzman Luis Chen-Aguilera turning compostNorthern Initiatives was able to help Wormie’s with capital at a time when it was truly needed. Wormie’s received a reimbursable state grant, meaning the company had to come up with the money first. Three mission lenders – Northern Initiatives, Rende Progress Capital, and the Fair Food Network - teamed up to provide capital and Wormie’s launched.

“Collaboration is an essential part of our climate lending plan,” said Sangalli. “We know how to lend money and help business owners grow and thrive, but we will rely on talented partners to install energy saving technologies and to turn the compost. It’s complicated, so we really rely on their knowledge and trustworthiness, which we assess with the same diligence we use on loans.”