There are a growing number of financial institutions that support worker cooperatives. And USFWC staff are busy working on several financing projects for members. Please contact us if you are aware of coop-friendly financial institutions not listed below.
Worker Ownership Fund: National loan fund specifically for worker cooperatives (more detailed information below)
The Working World: Provides investment capital and technical support for worker coops, focused on NYC
NCDF: Northcountry Cooperative Development Fund
CFNE: The Cooperative Fund of New England
Coop Capital: The Cooperative Capital Fund of New England
LEAF: Local Enterprise Assistance Fund: the only national fund that focuses its investment on worker cooperatives, in business since 1982.
Common Wealth Revolving Loan Fund: Lends in Ohio and surrounding states
Richmond Revolving Loan Fund (CA): Available for cooperatives operating in Richmond, CA
Valley Alliance for Worker Cooperatives Loan Fund: Coming in 2013!
NCCLF: Northern California Community Loan Fund
One Pacific Coast Bank: Community Development Finance Institution lending to worker cooperatives on the West Coast
NCB: National Cooperative Bank
USFWC Financing Projects:
Kiva Zip: USFWC and DAWN are endorsing partners for the new domestic micro loan program being launched by Kiva. USFWC member, TeamWorks, has two individual members who are piloting the program. Support their fundraising campaigns before April 17, 2013 (Alejandra and Adriana)!
Worker Coop Financing Needs Survey: In December 2012, USFWC surveyed members about ongoing financing needs. A report will be released in Spring 2013.
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The Worker Ownership Fund (WOF) is a national fund managed by Northcountry Cooperative Development Fund (NCDF) on behalf of the U.S. Federation of Worker Cooperatives (USFWC), to increase access to financing for start-up and existing worker-owned cooperatives.
NCDF and the USFWC understand the business structure of worker-owned cooperatives in a way that traditional lenders can't, and not only offer a new financing option for co-ops, but technical assistance and mentorship so that cooperatives can better develop a viable business plan and loan application.
Fund Focus To stimulate the development of worker cooperatives and democratic employment through the provision of debt capital. Recipients of financing may include cooperative developers as well as democratic enterprises.
Types of Financial Services Provided
Loans: To worker cooperatives
Rather than create a costly new institutional infrastructure, we have chosen Northcountry Cooperative Development Fund (a long-established and successful organization) to host a dedicated national worker ownership fund. The NCDF loan officers/committee will make the final call on loans/investments with the input of an advisory board of worker cooperative members and technical assistance specialists. This advisory board will critique and, when appropriate, help develop business plans. The advisory board will lend their accumulated wisdom regarding the special elements of organizational planning and education necessary for a worker cooperative to succeed; the board will help applicants by identifying possible resources for fulfilling the particular organizational and technical needs of democratic enterprises.
Priorities for Lending/Investing
Loans/investments will only be made if they satisfy the sound business standards/criteria developed through the experience and expertise of NCDF.Â That said, the following are additional social criteria that will be taken into account in deciding which sound business applications to favor with financing.
Democratic Job Creation: The topmost priority is democratic job creation. Applications will be favored in direct proportion to the number of democratic jobs they promise to create. Long-term job creation will be considered: thus a project intended to serve as a foundation for further cooperative developments would receive favorable consideration over a stand-alone project; likewise, it will be considered favorably if a cooperative is tied into cooperative networks/federations, as the benefits of the cooperative's growth is likely to be shared collaterally through networking.
Democratic Enterprise in Low-income and Underrepresented Communities: Business plans that will create democratic jobs in low-income communities and communities currently underrepresented in the worker cooperative movement (e.g., African-American) will receive favorable consideration.
Safeguards regarding Cooperative Longevity: Cooperative applicants will be favored to the extent that they include mechanisms to preserve the affordability/accessibility of membership by people of limited means and safeguards against the conversion of the business and its assets to conventional ownership.
Democratic Operation: Applying cooperatives will receive favorable consideration commensurate to the (anticipated or existing) levels of democratic participation of their workers in business operation. In addition to the standard elements, business plans for start-ups will be expected to include a plan for democratic organizational development and education.
United States: Lending/investments will be focused in the United States. However, collaborative projects with such partners as the Canadian Worker Co-op Capital Fund could be considered for cooperative enterprises that cross borders.
Projects Disfavored by Conventional Lenders/Investors: Priority will be given to projects that, although sound from a business perspective, would receive unfavorable consideration from conventional lenders. Whenever possible, the backing of the dedicated fund will be used to leverage support from other lenders/investors in the interests of furthering democratic job creation.
Technical Assistance for Borrowers
The United States Federation of Worker Cooperatives provides technical assistance and peer technical assistance for Worker Ownership Fund applicants, both for the process of requesting funding and in the followup once funding is received. For more information on this technical assistance, contact the USFWC at (415) 379-9201.
DOWNLOAD AN APPLICATION FOR THE WORKER OWNERSHIP FUND HERE