NCBA CLUSA leads coalition letter, recommends bill language to include co-ops in federal COVID-19 response

The pending legislation would ensure equal access to SBA assistance for all types of cooperatives.

On Friday, NCBA CLUSA President & CEO Doug O’Brien led a letter signed by cooperative association executives and sector leaders urging Congressional leadership to include cooperatives in Phase 3 of federal disaster assistance responding to the coronavirus (COVID-19) pandemic.

Specifically, the letter asks Congress to make all cooperative businesses eligible entities for Economic Injury Disaster Loans administered by the U.S. Small Business Administration. The letter also asks that SBA waive its personal guarantee requirement on loans to cooperatives.

Currently, Phase 3 legislation is under consideration by the Senate. Importantly, this legislation includes language requested by NCBA CLUSA that specifies the eligibility of all cooperative businesses with 500 employees or fewer and waives the SBA’s personal guarantee requirement on loans of $200,000 or less. This section of the bill also makes available Economic Injury grants of up to $10,000 to be used toward maintaining payroll, meeting increases costs due to supply chain disruptions, making rent or mortgage payments, among other uses.

Speaker Nancy Pelosi released a House version of a Phase 3 stimulus that includes similar co-op friendly language proposed by NCBA CLUSA. This bill would similarly make all co-ops eligible for SBA Economic Injury Disaster Loans, but would waive the personal guarantee requirement on loans up to $350,000. This bill would also ensure cooperatives are eligible entities for SBA Economic Injury grants of $10,000 or less.

The first legislative response to COVID-19 was signed into law on March 6, 2020. The Coronavirus Preparedness and Response Supplemental Appropriations Act provided $7 billion in low-interest direct loans to small businesses affected by the economic impacts of COVID-19. Under this legislation, some cooperatives, like consumer cooperatives, are ineligible to Economic Injury Disaster Loans.

The pending legislation would ensure equal access to SBA assistance for all types of cooperatives.

The pending legislation would ensure equal access to SBA assistance for all types of cooperatives.

NCBA CLUSA will continue to monitor the progress of these pending bills.

The letter was signed by the following cooperative association executives and sector leaders:

Doug O’Brien, President and CEO, National Cooperative Business Association CLUSA International
Jim Nussle, President & CEO, Credit Union National Association
Melissa Hoover, Executive Director, Democracy at Work Institute
Todd Van Hoose, President and CEO, Farm Credit Council
Cornelius Blanding, Executive Director, Federation of Southern Cooperatives/Land Assistance Fund
C.E. Pugh, Chief Executive Officer, National Co+op Grocers
Charles F. Conner, President and CEO, National Council of Farmer Cooperatives
Charles E. Snyder, Chief Executive Officer, National Cooperative Bank
Rob Larew , President, National Farmers Union
Jim Matheson, Chief Executive Officer, National Rural Electric Cooperatives Association
Erbin Crowell, Executive Director, Neighboring Food Co-op Association
Roger Noonan, President, New England Farmers Union
Shirley Bloomfield, Chief Executive Officer, NTCA – The Rural Broadband Association
Esteban Kelly, Executive Director, U.S. Federation of Worker Cooperatives

Share This Post

We hope you enjoyed this article. If you did, we would love it if you would share it to your social networks!