Low-Interest Business Loan Yields High “Cash Crop” for Family Farm

Above: Smith Farm, Conewago Township, Adams County, PA

The article was published in the Gettysburg Times, March 12, 2015

By Kaycee Kemper

Steve Smith, a third-generation Adams County farmer, approached us recently with one of the most unique requests for small business loans we’ve ever received. His family had been farming the same fertile land in Conewago Township for more than 85 years, but it wasn’t until 2014 that he had the opportunity to purchase and own this prime agricultural land rather than leasing it.

As we assisted Smith and his family, there were numerous unique twists and turns along the way.

The first step towards purchasing the land—154.3 acres— was the formation of Smith Real Estate Holdings, LLC. Back in 2009, Smith, along with sons Seth and Brent, had formed Smith and Sons Farm, LLC. So the progression to a real estate holding company went smoothly.

Coordinating efforts with Ellen Dayhoff at Adams County Agricultural Land Preservation, Smith and the previous landowners—The Corporation of Roman Catholic Clergymen—secured the farm’s future by having it designated as preserved farmland. The program, which purchases agricultural conservation easements on behalf of Adams County, restricts and limits the conversion of farmland to nonagricultural use.

Not only was the preservation easement an extremely unique component of the project, but another twist involved plans for a potential bypass around McSherrystown. The easement includes a provision that if such a bypass is built within the next 40 years, it would run along but not cut through Smith’s farmland. Adams County planners went on record as saying Smith’s farmland contains some of the county’s best soil.

With the land’s preservation status secured and Smith’s real estate holding company set up, here’s where the ACEDC’s efforts directly came into play.

Smith was an ideal candidate for the Small Business First Fund, a low interest loan program funded by the Department of Community and Economic Development (DCED). ACEDC is certified annually by DCED in order to process and administer loan and grant programs for Adams County’s businesses.

Smith was able to benefit from an “interest rate sale” being offered by DCED. His $200,000 loan has a fixed interest rate of 1.75% for a period of 15 years. Smith says he’s thankful for the low interest rate because it frees up operating capital for his business.

The public doesn’t often associate the ACEDC with farmland or preservation, but it’s a pleasure to support companies of all shapes, sizes and types, as we uphold our mission to enhance business retention and expansion efforts in Adams County.

Smith considers the entire process a valuable investment in his family’s future.

“It’s huge to us—knowing the land’s preserved,” Smith says. “To be able to keep this highly sought-after land as farmland, maintaining the (agricultural) history of the area, it’s reassuring.”

“I’m a third generation farmer, and my sons are fourth generation farmers. My oldest son has two boys… so they will be the fifth generation,” Smith says. “The whole reason for doing this is to keep the farm in the family.”

With the closing of the Small Business First Fund ‘s loan to Smith, ACEDC has facilitated a total of $26,508,360 in low interest loans and grants from the DCED to Adams County businesses in the past eight years. Contact us today, 717-334-0042, to see how we can help grow your business and add to Adams County’s economic success.

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