Why are we asking for member loans?
Member loans benefit the MCM Co-op because they reduce our need for outside loans and demonstrate to potential funders that our owners are invested in the project. Member loan assets will position us to secure grant funding to pay for equipment, and to ensure that we can open the store–fully stocked, staffed, and ready to go–in 2012.
Who can participate in the Member Loan Program?
Monadnock Community Market Co-op offers all member-owners who are current in their equity payments and who reside in New Hampshire the opportunity to participate in the member loan program.
How will the funds be used?
The MCM Co-op needs member loans to cover start-up costs prior to opening including equipment, hiring our General Manager, professional fees, and inventory as we prepare for opening day. Making a member loan gives the Co-op a “head start” by allowing us to begin operations with lower debt, setting us up for success!
Isn’t my membership enough? Why is a member loan needed?
Co-op Memberships will provide $200,000 of start-up capital for our business; Member Loans will provide the additional $800,000 needed.
Is a member loan a donation?
No, a member loan is an investment. When a member-owner makes a loan to the MCM Co-op, the MCM Co-op intends to repay the loan with interest. Our interest rates are very competitive – between 0 and 4%. Member-owners who would like to give additional support to the MCM Co-op can choose a zero or low interest rate.
Are Co-op Member Loans a common means for raising capital?
Yes! For years, food co-ops across the country have raised capital for major projects through member loans. Bill Gessner, a consultant for food co-ops from CDS Consulting Co-op has worked with 12 Co-ops in the last 3 years who have completed successful member loan campaigns between $300,000 and $1.5 million. Over the last 25 years, he knows of over 100 Food Co-ops who have used member loans campaigns to raise capital.
What are the terms of a loan?
You can choose an interest rate between 0 and 4% and a term of 6 to 10 years.
How much can I lend?
Our minimum size loan is $2000. We are looking for an average size loan of $5000. We recognize that not all member-owners will be able to lend $5,000, so if you are able, please consider lending more to help us reach our average.
How do I make a loan?
You will receive a phone call in the next two weeks from an MCM Co-op member who will answer your questions and offer to mail you additional loan information. If you have further questions or would like to receive a Member Loan Packet right away, contact the MCM Co-op at 355-8008 or monadnockcommunitymarket@gmail.com. When you are ready to make your loan, you will sign a subscription agreement.
How can I keep myself informed and involved in the Member Loan Campaign?
- Keep yourself informed by visiting our website at:www.monadnockcommunitymarket.com
- Add your name to our member loan update e-mail list: http://visitor.r20.constantcontact.com/d.jsp?llr=gyrag9cab&p=oi&m=1102537836294
- Read our monthly MCM Co-op newsletter.
- E-mail your questions/comments to us: monadnockcommunitymarket@gmail.com
The fine print:
- The Member Loan Campaign is open to all Monadnock Community Market Co-op member-owners who live in New Hampshire.
- The minimum loan we can accept is $2,000.
- Member lenders may choose a term between 6 and 10 years.
- Member lenders may choose whether or not to charge interest.
- Member lender may choose the following interest rates:
0-3% for loans below $10,000
AFR-4% for loans $10,000 and above
- Loan interest is simple interest to be paid once a year, when it’s financially prudent.
- Member loans are unsecured and subordinate to our bank loans. Member loans are at risk, so be sure to consider your capacity to absorb potential losses that are inherent in any business endeavor.
