Responding to a letter from NCBA CLUSA signed by more than 100 cooperatives and partner organizations, the U.S. House Small Business Committee will hold a full committee hearing this week to explore how existing federal programs can be optimized to meet the lending needs of cooperative businesses.
Called “Challenges and Benefits of Employee-owned Small Businesses,” the hearing will take place on Wednesday, February 12 at 11:30 am in Room 2360 of the Rayburn House Office Building in Washington, DC. Cooperators in the Washington, DC area are encouraged to attend the hearing. A livestream of the hearing will be available on the Committee’s website here.
In 2018, Congress passed the bipartisan Main Street Employee Ownership Act as part of the John S. McCain National Defense Authorization Act for Fiscal Year 2019. Motivated by the potential impact on the economy as waves of small business owners approach retirement age, Congress intended to ensure that the Small Business Administration (SBA) and the network of Small Business Development Centers across the nation were including conversions to cooperatively-owned and other employee-owned business structures, like Employee Stock Ownership Plans (ESOPs), in their education and outreach to business owners on succession planning.
Cooperators in the Washington, DC area are encouraged to attend the hearing. A livestream of the hearing will be available on the Committee’s website here.
Moreover, the law required the SBA to submit a report to Congress recommending alternatives to its personal guarantee requirement for lending to cooperative businesses. Currently, to access SBA financing, a business owner is required to provide a personal guarantee in the event that the loan cannot be repaid. However, the shared structure of cooperative owners that makes the business stronger and more resilient, also makes it nearly impossible for cooperatives to access SBA financing, which has long been a key factor to catalyzing small business growth.
After the release of the disappointing report, a coalition of more than 100 organizations signed a letter to both the House and Senate Small Business Committees requesting a hearing on this issue.
Today’s announcement is a recognition by Congress of the strength of the cooperative community and the degree of seriousness that the House Small Business Committee is taking our concerns about SBA’s lack of support for cooperative businesses.
Today’s announcement is a recognition by Congress of the strength of the cooperative community and the degree of seriousness that the House Small Business Committee is taking our concerns about SBA’s lack of support for cooperative businesses. Once again, NCBA CLUSA would like to express our gratitude to the cooperatives and partner organizations that joined us in this effort.
You can now share this news directly from NCBA CLUSA’s website with your U.S. elected officials. Simply enter your zip code in the pop-up box titled “Share this content with your representative” on the right-hand side of this page. If your U.S. Representative is a member of the House Small Business Committee, urge them to not only attend this important hearing, but also highlight the strength of the cooperatives in your Congressional district and the need for action by the Small Business Administration to ensure cooperative businesses can fairly access their small business programs.
If you have questions, email NCBA CLUSA’s Government Relations Manager Kate LaTour at firstname.lastname@example.org.