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  • Writer's pictureSkya Ducheneaux

The Long and Short of What we Do

Updated: Oct 8, 2019

Akiptan is the Lakota word for “working together, in a cooperative effort.”

At Akiptan we are always asked about what we do and how we do it. The short answer is: We provide innovative financing to Native American’s in Agriculture. The long answer is:

Akiptan’s goal is to change the way that finance is looked at when it comes to agriculture. The philosophy behind Akiptan is driven by patient capital, fair and flexible financing, building a solid relationship with the borrower, and innovation in lending. Akiptan assists the producer to find a solution that works best for their operation, allows for growth capacity, and helps the producer become a more proficient borrower with success in their operation. Akiptan offers financing for startups, operating capital, ownership, capital purchases, etc.

The biggest driver behind Akiptan is patient capital. With patient capital, the producer is making a long-term financial investment in their business. Akiptan offers two repayment options, 1) “Traditional Loan” and 2) “Investment.”

The “Traditional Loan” option is set up just like a bank loan where the borrower has annual payments consisting of both principal and interest over a set period of time with a set interest rate. Even though this option has similarities compared to a bank loan, it does have some differences as well. Akiptan believes in taking risk that a normal lender will not. With the “Traditional Loan,” option, a producer is allowed to extend their payments out over a longer period of time to allow for smaller payments which would be easier to make. Although this repayment option works for some operations, the “Investment” option is what truly allows for the most innovation, capacity building and flexibility.

Below is an example of the “Traditional Loan” repayment option:

The investment option is something that truly practices the values that Akiptan believes in. The investment option allows for Akiptan to “invest” money with a business, that ag business will do what it needs to to get up and running while making small, manageable “return on investment” payments for up to five years. After five years, or earlier if the client so chooses to, they will start paying back the “investment” in order to “buy Akiptan out” of their business. This “investment option” can be more simply stated as a loan with an interest only period. This option practices the patient capital and innovative financing that Akiptan was founded on and makes a measurable impact for the producer. This smaller, interest only payment allows for upfront capacity growth, cash operating, innovation, and other opportunities. Most agriculture financing is set up that all of the product has to be sold to make the bank payments, but this allows for the operations to reinvest their profits in themselves to grow their operation. One example that many producers have done is to use this option to retain heifers to start a replacement heifer program to no longer have to buy cows every year or to quickly expand their herd for less money. By the time that the 5 years interest only payments are done the operation has been able to increase in size to where as the once daunting principal payments are now easy to make. Below is an example of our Investment Option.

Akiptan does not have any prepayment penalties on neither the “Traditional Loan” option or the “Investment” option. The Investment does not have to stay in the interest only option for a full five years, that is just the maximum we can do. The producer also has the option to customize their repayment plan to annual, bi-annual, monthly, seasonal, etc. Akiptan offers financing for startups, operating capital, ownership, capital purchases, etc.

Akiptan not only provides fair lending, it also works with the clients to create future goals for their operations and a plan on how to get there. Akiptan’s staff strides to increase financial literacy skills that help to build a better borrower. The financial literacy training and technical assistance is catered to each client and their needs as every individual is different. Akiptan develops a solid relationship with their borrower through loan products and technical assistance which in turn sets their clients on the path to success.

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