Are Cooperatives Really So Difficult to Finance?

The employee ownership field is gaining visibility and setting more ambitious goals, particularly in the area of co-op conversions (the transfer of ownership in privately held firms to employees through democratically controlled cooperatives). To meet these goals, however, the field will need larger, more diverse but still values-aligned capital to finance these conversions.

Since 2012, CFNE has financed 15 co-op conversions including providing nine loans for business acquisitions and twelve working capital lines of credit to recently converted businesses. Some of our borrowers include: A Yard & A Half Landscaping Co-op, a largely immigrant co-op serving Boston’s western suburbs; Island Employee Co-op, a remote coastal Maine grocery and hardware retailer; and Ewing Controls, a specialized manufacturer of steam turbine controls in Greenfield, MA.

To ensure the success of these businesses, CFNE’s partners with co-op developers, including the Cooperative Development Institutethe ICA GroupVermont Employee Ownership Center and others, to promote employee ownership, assess project feasibility, and train worker-owners. While we have financed some projects independently of technical assistance partners, they are uncommon.

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