Establishing an industrial-scale composting facility is an expensive undertaking. Compost manufacturers report that acquiring and preparing the land, purchasing and installing the equipment, and securing the necessary permits can require anywhere from $500,000 to $2,000,000. For most people who are interested in opening a compost facility, these costs are prohibitive. Normally, entrepreneurs who face high up-front costs when starting new businesses can seek funding through bank loans or, depending on the type of enterprise, venture capital investment. For compost manufacturers, traditional bank loans are often not an option: many banks do not understand the business model or biological process of composting. Their confusion, combined with the hefty price tag and lack of credit history associated with emerging compost operations, means that many banks reject loan applications from fledgling composters out of hand. Government grant programs also tend to be risk-averse, so they gravitate to relatively mature businesses, and often require matching funds to share the risk burdens with the grant applicants. Venture capital firms sometimes show a greater tolerance for risk and are willing to give compost businesses a chance, but those investors expect generous equity shares or robust returns over a short time span, either of which can put undue pressure on new businesses. So even before beginning to accept feedstocks and test out their recipes, composters must already be creative and resourceful: most commercial compost manufacturers must pull together a variety of funding sources to get their facilities up and running. This presentation will examine the different sources of funding, supported by case studies to showcase the advantages and drawbacks of each option.
Speakers: Laurel Cohen
Duration: 20 minutes
Credits: 0.5
Member Price: $30.00
Non-Member Price: $52.50
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BUS.118-Financing Vehicles for Compost Producers-AC22.USCC
