A week into the Kootenay Co-op’s member loan campaign, the local store needing help for their next phase of business is seeing support for their growth.
“We reached $400,000 in committed loans after the first seven days and expect to hit $500,000 by the end of this week,” reports board director and member loans committee chair Susan Morrison.
Launched on October 1, the goal is to raise $1.5 million to equip the new store planned for the east end of Baker Street.
“Our members have been telling us for years that they want more space, an indoor seating area, store parking, a great classroom and meeting space,” says Morrison. “This is a big project and our members — through the member loans program — will play an important role in turning those hopes into a reality.”
General manager Deirdrie Lang anticipates that it will cost approximately $3 million to take the store from “an empty, unfinished 20,000 sq ft space” to “an inviting community-owned space, with energy efficient equipment, commissary kitchen, café, checkout counters, display units, lighting and all the other fixtures that will turn the building into our new co-op store.”
The co-op engaged in a similar member loans program in 1991 when the fledgling business moved from their Gerricks Cycle location to the current one at 295 Baker Street.
Jocelyn Carver, the co-op’s marketing and outreach manager, says turning to the membership rather than a bank is good for both members and the business.
“Member money is both a strong signal of support for the project and of confidence for the members,” she says.
Carver describes member capital as “patient capital” or “subordinate” with people being paid back after the banks. She explains interest rates “are reasonable for the co-op, quite favourable for the co-op.”
Loans under $10,000 are paid back at 3.5 per cent over the seven-year term. Loans over $10 to $25,000 are paid back at 3.75 per cent and loans over $25,000 are paid back at four per cent interest.
Members who need to take their money out after five years have the option to do so.
“We needed to build in some flexibility in recognition of our members needs too,” says Carver.
The loans are also unsecured, she explains further, which she knows is a potential concern. Full disclosure is available, she assures.
“Our financial projections that include member loans have been very carefully and conservatively done,” she says. “We’re confident we’re offering a good opportunity to our members but we also feel like people need to think about their own financial situation and think about the Co-op in a way that doesn’t put them individually at risk.”
Support for the Co-op is not the only reason members are committing to making loans, says loans program coordinator Marya Skrypiczajko.
“I have spoken with many members who are very excited about this local investment opportunity at a time when they are disenchanted with the traditional investment options; they want to invest in our member loans program so they can watch their money at work right here in Nelson.”
Additionally, they are keen to support the co-op’s move to the new store and the beautification of Hendryx Street between Baker and Vernon, she says.