Capital Campaign Basics: Member-Owner Loans and Preferred Shares

Hello, everyone!

I am here again to talk about HFC’s upcoming Capital Campaign which is how we will finance the opening of our community-owned grocery store.

Phase one of the Capital Campaign will involve giving members an opportunity to make loans to HFC. This is vital prior to approaching commercial lenders to obtain further capital. The commercial lenders need to see an adequate commitment from the community in order to invest their money.

Co-op members benefit when they invest in their co-ops by receiving a modest rate of return appropriate for a social investment, helping to expand options for fresh, local food for themselves and their families, having an investment vehicle that reflects their values, and getting the satisfaction of knowing they are putting their money to work doing good in their co-op and community.”  – Food Co-op Initiative

The two primary ways members can help to provide funding for their co-op are:

Fulfill the member share requirement: the member either make a one-time equity investment, or an annual equity investment until her/his share requirement is met or make an additional investment: either as additional non-voting equity, typically in the form of preferred shares, or debt in the form of member loans.”  – Food Co-op Initiative

Preferred shares are an alternative funding option we have not yet decided to use. There will be further information on them later after a decision has been made.

Thank you for reading!

Dale Case, Board Member