The Working World and Green Worker Cooperatives are excited to announce the launch of the Cooperative Green Seed Fund, a radical new way to finance the startup of socially and environmentally oriented worker-owned businesses in the borough of the Bronx in New York City.

The new fund is based on the award winning principles of non-extractive finance which the Working World has based on the Mondragon model that makes finance subordinate to the needs of people.

This means, for example, that no personal guarantees are required, and repayment only comes if the project is successful. In other words, risk is shared with the community loan-fund, not just born by the worker-owners.

It also means that while banks charge an absolute rate of “interest”, this fund gets repaid only through “profit-sharing” with a rate fixed at a ceiling of 9% of the principal invested, the returns of which are used to pay for operations and losses and keep the community fund solvent. This means that rather than undercutting a new business’s ability to startup with onerous interest and capital payments, the fund will only be repaid capital and share in profits when the cooperative has become profitable.

 

When it comes to finance, risk and some profit are shared with the community — in other words, we’re all in it together. When it comes to the cooperative, ownership and control belong solely to the workers. Worker ownership is the goal.

 

Just as important as the principles underlying this fund is the partnership that has created it. We believe that worker cooperative ownership can only become widespread through partnerships, or cooperation, of people and organizations that support it.

To learn more about the new fund, and ways that make it unique to the Bronx, please read the press release from the Green Worker Cooperative.