An advocacy update from National Cooperative Bank; First food co-op loan in SBA’s history!


An artist's rendition of Fredericksburg Food Co-op featuring a brick storefront and outdoor patio for community members to gather.
Fredericksburg Food Co-op will open this year and provide much-needed grocery options in Fredericksburg, Virginia. [artist’s rendition: Fredericksburg Food Co-op]
With a new President and the beginning of a new Congressional session, the cooperative sector continues to advocate for affordable housing, growth of small businesses and the creation of more cooperatives. The National Cooperative Bank (NCB)’s Strategic Initiatives team of John Holdsclaw and R.L. Condra coordinates with co-op associations and organizations on these issues.

What type of federal programs do we support? The U.S. Department of Agriculture (USDA) oversees a grant program that assists co-op development centers nationwide to create and develop cooperatives in rural communities. This program is underfunded, and we continue to ask Congress for an increase in funding on behalf of the 40 development centers across the country.

The Small Business Administration (SBA) provides loan guarantees to banks to make loans to small businesses. The agency’s bureaucratic regulations make it difficult for food and worker co-ops to access these valuable lending programs. I was proud to testify on behalf of NCB before the House Committee on Small Business last year, and we continue to work with Congress and the SBA to level the playing field for cooperatives.

Have we had success? The answer is “Yes!” The SBA had a regulation in place since the 1960s that specifically excluded food and worker co-ops from applying for loans. By working directly with SBA, we (along with senior NCB staff) were able to convince agency officials to change this regulation—one that had been in place for over 40 years! With this change, NCB lenders Mike Novak and Dami Odeltola were able to make a $1.4 million loan to the Fredericksburg, Virginia Food Co-op, a startup that will open this year and provide much-needed grocery options in that community. This is the first food co-op loan using the SBA lending programs in the agency’s 57 year history!

Recently, we were able to ensure that food, worker and housing co-ops were eligible for the COVID Relief legislative packages that were passed by Congress. Without our efforts in partnership with a few key co-op organizations including NCBA CLUSA, co-ops would not have been able to access these essential programs that saved jobs and kept small businesses open during the pandemic.

These efforts paid off for co-op businesses. More than 1,800 co-op businesses received COVID loans of $150,000 or greater that preserved an estimated 93,000 jobs. Most of these loans would not have been possible without advocacy efforts by the cooperative community to remind Congress… “Hey, don’t forget about co-ops!”

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