QFD and Prospera's Loan Program in The Bozeman Daily Chronicle

Jason Bacaj, Chronicle Staff Writer
Posted: Wednesday, July 23, 2014 5:00 am

Last year found Randy Lindberg caught in a conundrum familiar to most seasonal businesses.

He and his wife, Nancy, had to ramp up inventory for the business they co-founded, Quality Foods Distributing, in order to fill increasingly large orders from Yellowstone, Glacier and Grand Teton national parks. And of course they had to do it before they got paid for those orders.

“It's been tremendous,” Lindberg said of the 3-year-old company's growth. “It continues to ramp up every year. … When you're growing that fast, sometimes you can just outstrip your cash flow.”

The company's regular banker at First Security Bank recommended they get in touch with local nonprofit economic development group Prospera Business Network to see about alternative financing. Providing loans and credit lines to match a young company's needs isn't always possible for banks, Lindberg said.

The Lindbergs received a $200,000 loan for Quality Foods Distributing from the U.S. Department of Agriculture's Intermediary Relending Program, which Prospera manages locally. The program is in place to increase economic activity and employment in rural communities and dispensed through local organizations such as Prospera.

The nonprofit received another injection of cash from the USDA this year. It was matched by the Montana Board of Investments, which is under the Montana Department of Commerce, giving Prospera a total of $750,000 to lend to businesses in Gallatin and Park counties. It received the money after participating in a competitive process with the federal agency, and was the only group in Montana to get a piece of the program's money.

Stuart Leidner, executive director of Prospera, said the organization needs to lend the money out “in as efficient an amount of time as possible.” People interested in applying for a loan can call Prospera or find a loan application on the organization's website, he said.

“The idea of our loan funds is we're supposed to be that gap financing,” Leidner explained. “If banks are unable to lend to a business for whatever reasons, our loan programs are designed to take a bit more risk. Not that we're going to just throw caution to the wind, but we're designed to take a bit more risk.”

Prospera also has two other loan funds: the Bozeman Revolving Loan Fund and the Livingston/Park County Revolving Loan Fund. The way the funds work is money is lent out to businesspeople. It typically covers the gap between what a bank is willing to lend a fledgling business and the amount of money the business needs to achieve a specific business goal.

As the businesspeople repay the loan, that money is put back into the fund and lent out to other businesspeople down the line.

“We like to say ‘all local all the time' because as those entrepreneurs repay that loan, that money stays right in that jurisdiction,” Leidner said.

Lindberg said the loan allowed the company to continue its steady growth. Quality Foods Distributing's growth this year is even greater than last year — he and his wife were able to hire two more full-time employees since receiving the USDA loan. That brings the number of employees at Quality Foods to six.

Jason Bacaj may be reached at jasonb@dailychronicle.com or 582-2635.

Quality Foods Distributing
Bozeman Montana 406-551-2231
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