New equity funds ignite rural renaissance and some renewables

New private investment funds financed by the Farm Credit System and rigorously vetted by USDA are capturing some of the equity capital that typically ignores rural America. Led by St. Louis-based Advantage Capital Agribusiness Partners, which USDA licensed as a Rural Business Investment Company (RBIC) in 2014, current and prospective RBICs could deliver over $1 billion in capital earmarked for rural business financing. Advantage Principal Tim Hassler sees compelling need to pump this new investment capital into rural America. “People in rural America have a hard time finding the right capital resources that a business needs,” he tells Agri-Pulse. “So, it certainly holds back the rural economy and that’s exacerbated by younger generations moving to urban areas because of the shortage of quality jobs in their rural areas.” Hassler says that with the East and West coasts controlling 80 percent of venture capital, Middle America is seriously shortchanged, especially in rural areas. He explains that as an RBIC, “We’ve met with a tremendous number of companies seeking capital . . . which tells me there’s significant pent-up demand for capital.”Hassler sees an urgent need not only for today’s RBICs but plenty more. That’s because each RBIC has its own niche, with Advantage being a private equity fund focused on “established companies, to help grow them.” Its parent, Advantage Capital, has been doing that since 1992, targeting rural businesses with significant growth potential.