Patient capital model enables Dean Dupris and Kristen Lawrence to achieve herd growth.
Nearly a decade ago, Dean Dupris was introduced to Four Bands through our CREATE (Cheyenne River Entrepreneurial Assistance Training and Education) class. Although he graduated, he ended up working a full-time job for several years. As time went on, he saw many people graduate from CREATE and start their own businesses. It was something he always kept in the back of his mind.
In 2017, Dean and his girlfriend, Kristen Lawrence, started running beef cattle on a piece of tribally-leased land 40 minutes outside of Timber Lake, South Dakota. They obtained a Farm Service Agency (FSA) loan to start the operation, but three years later, the herd size was waning. With traditional agriculture loans, the annual repayment is evenly spread over the life of the loan, making it nearly impossible for start-up farmers and ranchers to realize a profit in their early years. With razor-thin margins, this financing model creates greater potential for a business to fail and often forces ag producers to work a second job.
“Our herd was shrinking every year. We didn’t have enough cushion to grow our herd, and you have to sell everything to make your payment,” explains Dean.
In 2020, Dean reconnected with Four Bands and used an ag loan to purchase 33 more cows. Working with our staff, he created a business plan to turn his downward trajectory into an upward one.
“Our plan is to sell all the steers and keep as many heifers as possible. With Four Bands, we’re growing our herd,” says Dean.
Different from traditional financing models, our ag loan uses a graduated payment model with a longer term. It is sometimes referred to as “patient capital.” For the first few years, the payment is smaller, enabling ranchers to grow their herd and positioning them for future success. With the addition of the “Four Bands cows,” as Dean calls them, he’ll go from selling 16 more head per year to 56 more by the end of his loan term in seven years.
In comparison, a standard loan would be paid off within five years but would leave the rancher with a herd comprised of only 17 head of cows. Each year they’d have to sell, not only the entire calf crop, but also a part of the original herd just to repay the loan. By the end of the loan term, they’d have a herd about half the size of what they started with.
Dean says, in addition to the financing, the assistance and resources he’s received from Four Bands have made all the difference. He regularly reviews his livestock plan on a laptop he purchased with a technology grant, an he was also able to purchase a few bulls with an equity grant.
“We’re grateful for Four Bands. They gave us the opportunity of a lifetime,” expresses Dean in appreciation.