Updated by Steward Team
What are ‘anchor lenders’?
Qualified lenders can participate in a Steward loan for as little as $100. While this empowers people to support their local farms and the sustainable agriculture movement, it would require a lot of lenders to raise a reasonable commercial loan.
That’s where anchor lenders come in. These are people who understand your business, are motivated by your goals, and have the financial ability to contribute a significant amount to your loan. Depending on the value of your loan, they could be contributing anywhere from $5,000 to $50,000 and will make up a sizable portion of your overall loan.
Why are anchor lenders important?
As Steward loans are funded by private individuals, there is often an element of social proof needed to convince lenders to participate. While people may believe in your mission and love what you’re doing, there is hesitation to be the first in the pool. When anchor lenders participate in your loan, they are communicating to others that they have confidence in your business and are willing to back it financially. The progress of your raise is always visible on your project page, so clearly seeing that other lenders are contributing creates momentum within the wider lender community to fund a loan to completion.
For this reason, securing your anchor lenders should be the primary focus of your efforts during your raise campaign.
Who should my anchor lenders be?
Anchor lenders are likely to be individuals, families or organizations that:
- You have an existing, direct relationship with, or you can get a personal introduction to
- Understand your business and the market you operate in
- Have a high net worth and prior experience with finance or investing
- Are members of your local community, or have some connection to your area
These types of lenders are rarely sourced from social media posts, or email newsletters (although it does happen!), so will require a more hands-on approach. Phone calls and in-person meetings are usually the best means of communication to explain this opportunity to anchor lenders.