A business is more likely to succeed as a cooperative if the previous owner has established a workplace culture of mutual respect and openness, and has involved employees in decision-making. It appears to be possible for a cooperative to purchase a business in phases, and still qualify for special tax treatment. It is important for employees who wish to become owners to start saving early in the process. Social investors can sometimes be found who are willing to purchase non-voting preferred stock. There are several loan sources devoted to cooperatives and other community development ventures.
Banks are increasingly willing to lend to cooperatives.
In some situations, owner financing is essential. The Cooperative Development Institute in Greenfield, Massachusetts supports development of cooperatives of all sorts. New Leaf can help assess the potential for a worker co-op buyout of your business, connect you and your employees with consultants, attorneys, accountants and training programs and, in some cases, help with financing. Don Jamison, Director of the New Leaf Cooperative Enterprise Program, Burlington Community Land Trust, P.O. Box 523, Burlington, Vermont 05402. All Rights Reserved.