In 2012, Red Emma’s Bookstore Coffeehouse decided it was time to move to another, larger location in Baltimore. Business was good, and growing. They’d seen nearly a decade of modestly positive cash flow. There were twice the number of people working at Red Emma’s since it opened. There could have been more if not for the small space. They needed $200,000 to finance the expansion into a new space.
The only problem, according to lenders? Red Emma’s is a worker cooperative, meaning that each worker-owner has an equal ownership stake in the business, and they also share responsibility for business decisions.
“One of the things that has always been the hardest about financing cooperatives is finding lenders or finding investors that understand the uniqueness of the structure,” says Kate Khatib, one of the seven founding worker-owners of Red Emma’s.
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