NCBA calls for small business administration lending programmes for food co-ops

The National Cooperative Business Association is advocating for changes to small business administration (SBA) regulations in order to enable co-operatives to gain access to SBA lending programmes. The NCBA has already raised the issue with the Obama Administration during the White House Community Leaders Briefing in May.

The co-ops association called upon the US Congress to change SBA regulations, initiating a “Call to Actions” campaign. Congressman Ron Kind supported the initiative by circulating a “Dear Colleague” letter in the House of Representatives, asking the SBA to expedite the reinterpretation of regulations that prohibit food co-operatives from accessing the SBA lending programmes. The NCBA launched an appeal to all US citizens to call their representative’s office and ask their member to sign on to the “Dear Colleague” letter.

Following the NCBA-led campaign, 25 members of the Congress signed the letter. In addition, more than 70 letters from individuals, co-operatives and co-operative organisations sent letters to the NCBA and the SBA to express their support for the proposed changes.

The letter, addressed to the Administrator of the SBA, appealed to the Administration’s commitment to removing unnecessary barriers for small businesses. The NCBA claims that a reinterpretation of the existing SBA regulation is required to secure a fairer business environment for food co-ops.

US food co-operatives bring more than 12,000 jobs and $1.4 billion in annual sales to local economies. They play a major role in boosting local economies, redistributing income and providing locally produced healthy food.

According to the NCBA, in the last three years 61 food co-operatives were created, and hundreds more are in their incipient stages. All are small businesses, with local employers in need for access to capital for growth and expansion. The NCBA estimates these small local co-ops can be the source for hundreds of jobs and millions of dollars in annual sales. At present, none of these small co-ops are able to apply for SBA lending due to the current regulations.

The NCBA hopes to celebrate the International Year of Co-operatives with a public announcement by the SBA explaining that the barriers to food co-ops eligibility for SBA lending are being removed.

This is not the first legislative initiative the NCBA has put forward. In December 2011 Congressman Chaka Fattah, the Democratic representative for Pennsylvania, and three co-sponsors introduced the National Cooperative Development Act. 

The legislation would establish a National Cooperative Development Center to provide capital, training and other resources to foster co-operative development throughout the US. This bill is predicted to have a 2% chance of being enacted.