Slow Money

When Lula Poulos decided in 2011 to sell some of the soups from her Southern Pines restaurant to retail outlets, she turned to Slow Money NC to secure an unconventional loan to get the new wholesale business started.

“We were branching out to the Fresh Market, A Southern Season and places like that,” said Poulos, owner of Lula’s Cafe on Broad Street. “I was already doing soups for Sandhills Farm to Table (SF2T).”

In fact, Poulos received an initial boost from SF2T co-founder Fenton Wilkinson, who put her in touch with Carol Peppe Hewitt, the driving force behind Slow Money NC.

“Carol made the loan,” Poulos said. “It wasn’t a huge amount of money. She was very easy and delightful to work with, and she’s very knowledgeable.”

Hewitt drives all over North Carolina and beyond, spreading the message of Slow Money NC, a small but growing movement of radical microfinance.

“There’s no reason this can’t be replicated in every community across the United States,” Hewitt said last week during a  presentation at the Blue Horse Market in Whispering Pines. “I’m happy to help anybody get started. I can teach them how.”

Since Slow Money NC was founded in 2010, more than 100 loans totaling almost $1.1 million have been made to farmers and food entrepreneurs across the state.

But the nonprofit is not a lending institution. Rather, it’s a network that encourages face-to-face meetings between people who need money and those who have it to lend and believe in the mission.

The loans are peer-to-peer, in the form of promissory notes, which is important because direct personal loans do not require SEC filings. Credit checks are not required, although some loans are secured with collateral.

Most loans range from $2,000 to $30,000, and lenders typically earn an interest rate between 2 percent and 4 percent.

“They’re intentionally affordable,” Hewitt said. “A lot of our lenders are just ordinary folks. They care about farming and local food, and put their money where there mouth is. Lots of people can play.”

Although Hewitt screens borrowers, the lending decision is up to the investor.

“I just match-make,” she said.

Hewitt said the only underperforming loans are from 2011, and all involved start-ups.

“We’re much more wary now of new businesses,” she said. “They’re tough because they’re very risky.”

Hewitt, a lifelong activist and entrepreneur who lives in Pittsboro, does not take a salary for her Slow Money work.

“We don’t have a lot of expenses,” she said. “If my laptop is open, we’re open. If it’s closed, we’re closed.”

Tom McPherson, a retired serial entrepreneur who serves on the Moore Forward Board of Directors, said Hewitt’s message resonated with him because he grew up on a farm near Blanch, in Caswell County.

“I will probably entertain opportunities to invest,” said McPherson, who has been involved in five start-ups backed by traditional venture capital. “It’s not really about making a return on your money. It’s about making a difference.”

McPherson said he was not surprised by the high loan payback rate.

“Small business people have very high ethics,” he said. “They just need a little bit of help from time to time.”

The event at Blue Horse Market was attended by more than 30 people and included a sampling of products from local food vendors. For example, Paradox Farm in West End provided goat cheese, Half Acre Farm in Southern Pines had three kinds of dip, and Black Rock Winery in Carthage offered samples of several wines.

Charlotte Vetter, a retired CPA and SF2T volunteer, said she invited Hewitt to Moore County after hearing her speak about Slow Money NC elsewhere.

“I just thought the folks here needed to hear what she had to say,” Vetter said. “All of the things we need are here. You just have to connect the suppliers, customers and investors. This is a way that people with the passion to do something local can work together.”

After speaking, Hewitt signed copies of her new book, “Financing Our Foodshed: Growing Local Food with Slow Money.”

“I wrote the book because there’s very little written about in the local food canon,” she said. “I wrote to inspire people throughout the United States to get involved with their local food movement. It is a movement, and it’s larger than most people realize.”

Although Poulos said the economy forced her to abandon the wholesale business, she is thrilled that Hewitt included Lula’s Cafe in the book.

“She is very kind,” Poulos said. “I would recommend her to anyone.”

Hewitt said she told Poulos not to pay her back.

“When I go into Lula’s, I don’t pay,” Hewitt said with a smile. “Sometimes, you get every penny back. Sometimes, it’s barter. These loans make a big difference. When someone believes in you, that’s crucial.

“There are projects out there involving amazing people who really do need our support.”

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