Following news that the Small Business Administration (SBA)’s report to Congress on alternatives to the personal guarantee requirement does not satisfy the requirements of the bipartisan Main Street Employee Ownership Act, NCBA CLUSA and its partners are preparing to send a coalition letter to the House and Senate Committees on Small Business.
The shared ownership structure of a cooperative business makes the SBA’s personal guarantee requirement nearly impossible to fulfill when attempting to access SBA financing. The coalition letter requests a hearing on SBA’s report that will work toward finding a solution that both upholds the intent of Congress in the Main Street Employee Ownership Act and levels the playing field for cooperative businesses.
“We appreciated SBA’s engagement and were hopeful there would be a commonsense solution to resolve the barriers for cooperative businesses,” the letter states. “Additionally, we were optimistic that SBA would take a nominal step and provide alternatives and ideas of its own.” Instead, the letter continues, SBA fell back on its existing requirements that “make it implausible for cooperative businesses to access the agency’s programs,” sidestepping the Main Street Employee Ownership Act’s clear requirement to “study and recommend practical alternatives for cooperatives that will satisfy the loan guarantee requirements of the Administration.”
Already, nearly 50 partners—ranging from national organizations to individual cooperatives—have signed on. We strongly encourage you to add your organization to the coalition letter and share this opportunity with your networks to ensure we build a broad national coalition.
A large number of co-signers will show solidarity within the cooperative community and demonstrate our commitment to continue advocating for full access to SBA lending programs.
To sign on to the letter, please complete this short form. Organizations will be able to sign on until close of business on Friday, August 30. If you have questions, email NCBA CLUSA’s Government Relations Manager Kate LaTour at firstname.lastname@example.org.