Owners have questions. We've got answers!
Owners ask some pretty insightful and inspiring stuff and we covered some of them in this blog post recently: What the Owner Loan Campaign is Teaching Me About Chicago Market Owners.
But the questions keep coming, so here are a few more in this roundup of Top Questions, mostly about details and loan mechanics, so here goes:
1. Why aren't you asking for donations instead of loans?
Two reasons, really. One is that our project is ambitious - together, we want to build a pretty amazing store and the build-out costs add up, so our Owner Loan fundraising goal is $1.8 million. We just don't think we'll get there with small donations. So our preference is larger loans from Owners, which we'll pay back with a fair rate of interest.
The other important thing about this loan participation from Owners is the strong support it demonstrates to our bank. We will ask a bank to lend us money also and they do so based in part on the funds and the commitment we Owners show. The bank will want to know we are supportive of our Co-op and will shop there regularly once it's open - loans demonstrate that support more than donations because they show an ongoing relationship between Owner and Co-op.
2. I already supported by becoming an Owner; why are you asking me for more money now?
Thank you for being an Owner - we love you for that! Your Owner share purchase is an important part of our fundraising too. When we hit 2000 Owners, that will total about $575,000 in equity. Our bank loan will depend on the sum of that equity and our Owner Loan funds, so $575,000 + $1,800,000 = $2,375,000.
So Owners DO support the Co-op through their share purchase, but they can also support through Owner loans. It's of course not a requirement of any one individual Owner, but reaching our $1.8 million goal together IS a requirement of our funding plan.
Plus, being an Owner of a Co-op is different from being a member of another store - it is not a passive thing. Instead, it's an ongoing commitment between the business and the Owners to support each other.
3. What happens to our loan money if the store never gets built or isn't successful?
If the Board and Owners come to the point of dissolving the business, we would pay any existing expenses - we're hiring consultants and architects even now to move things forward as soon as possible toward the store we all want - and then distribute remaining funds back to Owners and lenders. We need most of the Owner Loan funds on hand soon to demonstrate to the bank we have those funds, so we are doing our best to reduce use of these funds for operating expenses as much as possible.
4. Can we really raise $1,800,000?
Yes! Our friends at the Fredricksburg Food Cooperative in Virginia are doing it right now! Their goal is similar - $1,600,000 and through Owner loans, they are almost there at $1.5 million! It can absolutely be done and we think Chicago is up to the challenge! But it takes as many Owners loaning as possible and it takes some large loans - a Fredricksburg Owner recently loaned $75,000 for a match. Owners can't wait for others to do it - we all have to work together to build our Co-op.
BONUS QUESTION: Can my dog Benny loan?
A: Hah! No and to be honest, we don't really get this question, but we love that Michelle brought Benny out to pose for her testimonial photo with her. Read why she loaned here!
More great reading:
Why the Co-op's Owner Loan Campaign Matters
Still have questions?
We probably covered them in our Owner Loan FAQs!
Want to talk to a real live person about the Owner Loan process? Email Jessica!