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Cooperative Business Loans

Who can get cooperative business loans?

Any co-op that is a member of the Fund can apply for a loan from NCDF. Our current borrowers include consumer, worker, producer and housing cooperatives.

What can cooperative business loans be used for?

Expansion and relocation. NCDF has helped many cooperatives successfully expand and relocate.

Working capital. NCDF provides flexible loan terms and lines of credit to fit your needs.

Rehab and replacement. If you own the building where your co-op is located, or if you are a member of a housing co-op that needs funding for rehab or other capital improvements, you've come to the right place! NCDF can put a financing package together that fits your needs.

Equipment. Need a freezer to expand your frozen foods section? Want to convert your delivery truck to biodiesel? Maybe a new computer system would help your business gain efficient? NCDF can help.

Other needs. We're happy to work with you if your financing needs don't fit into any particular category. Cooperatives have often thought of new and innovative approaches to doing business, and NCDF supports your creative approach through flexible financing.

Cooperative Disaster Relief Fund

What kinds of disasters are covered by the CDRF?

The CDRF was established to respond to damage caused by natural disaster (flood, tornado, hurricane, earthquake etc.) of a type not generally covered by conventional business insurance.  It is not designed to serve as a replacement for adequate business insurance.

How much money does the CDRF have, and how much is given away?

The CDRF began with a goal of maintaining an ongoing fund with a minimum balance of $20,000.  Because so many food cooperatives and organic or sustainable family farmers were devastated in 2008, CDRF will limit the dollar amount to $5,000 per applicant (or half the fund’s assets, whichever is less).

What kinds of expenses can be covered?

Fund grants may be used to pay for clean-up, repair or replace damaged equipment or rebuild facilities.  Funds may also be used for damage and loss of saleable products, loan and mortgage payments and testing for contaminants from runoff. Other uses for funds may be proposed by applicants in their application letter.  CDRF money cannot be used to replace income from lost sales or other uses of a speculative nature.

Who makes the decisions for funding?

The CDRF trustees are responsible for generating funding guidelines and for making all funding decisions.  The financial need of the applicant and the relative impact of the disaster on its continued operations are key criteria for funding decisions.  All decisions of the trustees are final.

If my co-op is a contributor to the CDRF, are we guaranteed of getting our money back should our co-op ever suffer a disaster?

No.  The CDRF is not an insurance pool.  Any co-op, contributor or not, may apply and receive a grant.  Funding decisions are based on the nature of the disaster and the need of the applicant.  Contributor status is not a factor in awarding grants. The goal, however,  is to build the Fund to such a size that every co-op in need would receive funding.  The amount of money awarded each year will be a function of both the amount of money in the CDRF and the number of requests we receive.

Can any food co-op or farmer apply for a grant?  What about non-co-ops?

The CDRF is intended for use by food cooperatives across the country working in the natural or organic foods industry.  Applicants may be consumer, producer, worker, or secondary cooperatives.  In addition to food cooperatives, the Fund has added assistance to organic or sustainable family farmers who supply them, as many of these producers also suffered major losses.

Priority for grants is given to smaller cooperatives or family farmers, or those with otherwise limited assets.  Non-cooperatives may apply for funding only if the organization essentially operates on a cooperative basis by incorporating the essential elements of cooperation in its governance structure.

A co-op or farmer does not have to be a contributor to the Fund in order to apply for and receive a grant from the CDRF.

Cooperative Home Loans

What housing cooperatives are approved for individual share loans?

Can I get a loan to buy a share in a co-op?

Yes! Individuals can get share loans (also called "co-op mortgages" or "co-op loans") to finance the purchase of their share in a housing cooperative. This is a service that most traditional lenders don't offer. Visit NCDFs Borrow page and call or e-mail Timeka Kuhnley at (612) 767-2115; timeka@ncdf.coop for more information on how you can access these funds. If you are looking for a housing co-op to join, visit www.coopliving.coop for listings (it is currently not working, however).

Can a housing co-op get a loan as a whole?

Yes! Housing co-ops can get loans from NCDF for acquisition or rehabilitation of a property through NCDF's Commercial Loan program. Visit our Borrow page and call or e-mail Jim Shadko at (612) 767-2123; jim@ncdf.coop for more information on how housing co-ops can access these funds.

What kinds of co-ops does NCF develop?

Cooperatives take many forms. They can be 1) market rate, increasing in value according to the general housing market, or 2) "limited equity," meaning that steps are taken to ensure that the co-op stays affordable for a long time. Beyond that, housing cooperatives can take just about any form you can imagine-artist's lofts, low-income housing, and more. At NCF, we have concentrated our efforts in the following areas:

Manufactured Home Park Cooperatives. Residents in manufactured home parks are among the most vulnerable to steep rent increases, sub-par infrastructure, and displacement. NCF can help residents cooperatively purchase their parks and gain control over the property and their quality of life. Two manufactured home parks have become cooperatives in Minnesota in the last year, and plans are underway to convert several more in Minnesota and Wisconsin.

Rental Conversions. Residents living in traditional apartment buildings can organize to purchase the building when a property owner puts it on the market.

Low-Income Housing Tax Credit (LIHTC) Conversions. As many LIHTC properties reach the end of their 15-year affordable housing requirement, NCDF is helping residents to organize and cooperatively purchase their LIHTC properties-ensuring that their housing will remain affordable for a long time.

How does NCF help housing co-ops?

Access to Capital. NCF helps them secure primary financing, grant funding, and other sources of capital. We also work closely with NCDF and NCFCU which offer housing cooperative loans and share loans.

Budget Development. We help new co-ops develop and maintain a sustainable operating budget that is consistent with the co-op's financial goals.

Feasibility Studies. We conduct preliminary research into suggested cooperative housing projects, evaluating their financial and structural feasibility to ensure that resident purchase is a sound investment.

Due Diligence. We assess site infrastructure, appraise properties, and conduct phase I environmental assessments to ensure that a potential housing site is a sound investment for its residents.

Navigating the Legal System. We can assist cooperatives with complicated legal documentation and processes, and help them find independent representation.

Organizational Development. We help resident organizations form cooperatives as a legal entity, create governing boards and committees, develop cooperative rules and bylaws, and increase capacity for effective meetings, conflict resolution, and financial planning.

Copyright © Northcountry Cooperative Development Fund
219 Main Street SE, Suite 500, Minneapolis, MN 55414
Office Phone: (612) 331-9103; fax: (612) 331-9145; general e-mail: info@ncdf.coop