SBA gives the green light for cooperatives in the Paycheck Protection Program

Today, the Small Business Administration has published guidelines and opened applications for the Paycheck Protection Program (PPP).  This was established under the CARES Act, which provides $2 trillion in aid in response to COVID-19. The PPP provides low-interest loans of up to $10 million to nonprofits and small businesses. These are actually issued by private lenders rather than the government directly, though they are guaranteed by the SBA. These loans may be forgiven if borrowers meet certain requirements.

Until the  interim rule was issued, guidelines have not been clear regarding cooperative eligibility for some SBA programs. The USFWC, alongside a coalition of co-op leaders, led by our member and partner NCBA CLUSA, issued a letter this week urging the U.S. Small Business Administration (SBA) to ensure that all cooperatives are eligible for the PPP.

We are pleased to share that the interim rule issued by the SBA indicates that worker cooperatives and many others including agriculture, purchasing, and consumer food co-ops, will be able to access Paycheck Protection Program loans.

“The fact that cooperatives are eligible for SBA support is a good signal from the Small Business Administration. Access to this relief is indicative of how economically devastating COVID-19  has been in such a short amount of time. Relief funding is welcome news for cooperative businesses and their workers.” said Esteban Kelly, Executive Director of the USFWC. “Businesses like our worker -owned and -governed member co-ops are an underserved sector of the small business community. We have fought for for decades for co-op eligibility across the spectrum of SBA programs, are looking forward to continuing our work with the SBA to ensure that these guidelines inform long-term co-op eligibility for SBA programs. We are proud to be working with our national partners and mobilizing members to ensure that cooperatives in the U.S. receive the support they deserve.”

Find an eligible lending institution for the PPP near you:

Recipients of the PPP are also still qualified for an Economic Injury Disaster Loan – we encourage all worker cooperatives to apply for this loan, and to ask for the $10,000 advance, which will  be forgiven if the business uses the money for approved funds, and which you may keep regardless of whether you receive the EIDL.

As always, keep up with the latest COVID-19 information at

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