Member-Owner Loan Program

Grow Your Co-op!

The Gardiner Food Co-op is seeking loans from its member-owners as an important part of raising the funds needed to solidify and strengthen the co-op financially during its first years in business. This loan program is intended as an opportunity to enhance the availability of local & sustainable consumer goods and services through financial support of the co-op retail food store, not as an investment opportunity (Member-owner loans involve some risks of loss and should be considered only by persons who can afford to assume such risks).

Terms (See the Member-Owner Loan Program disclosure document for complete info)

  • Available only to Gardiner Food Co-op member-owners  (see subscription agreement)
  • Member-owner loans from $500-100,000
  • Loan terms are 5, 7 or 9 years
  • Lenders select interest rates:
    • 0-1% on loans of 5 years
    • 0-1.25% on loans of 7 years
    • 0-1.5% on loans of 9 years or more
  • Interest is compounded annually and paid with principle at maturity.
  • Member-owner loans are secured and subordinate to senior loans.
  • To ensure that the secured interest will be fairly allocated to all lenders, the Co-op will empower a trustee.

Benefits of member loans
• There are many benefits for the co-op to having its member-owners buy-in and having loans of lower interest rates than commercial loans is a big one for a co-op that is just starting up, because it reduces the pressure of long-term debt.
• Member-owner loans keep our dollars local and reduce dependence on outside capital.
• Member-owner loans demonstrate tangible support for our cooperative model of business and vision of our community.
• Member-owner loans will help the Co-op thrive through the first few years of operations as sales continue to grow, and give the Co-op a unique opportunity to continuously improve its offering and customer service as it grows into itself and upholds its mission.

To make a member-owner loan, please call our Member-owner loan campaign lead Veronique Vendette at 207.485.0175 or send an email message to You should also refer to the member-owner loan program disclosure document and the member-owner loan subscription agreement.


Why Member Loans?

(Inspired by the member loan toolbox of the Food Co-op Initiative)

There are 3 primary ways member-owners can help capitalize (i.e. provide funding to) their food co-op:

1. Shop at the co-op: This contributes to the co-op’s profitability, with a portion of the profits being retained as capital, and reinvested in the cooperative.
2. Fulfill the member-owner share requirement; in our Co-op’s case it is an initial $100 equity investment, and a $15 equity investment yearly after the first year.
3. Make an additional investment: Either as additional equity (non-voting) or as a member-owner loan.

In order for food co-ops to raise significant amounts of capital quickly, an increasingly popular, successful and necessary choice has been the member-owner loan programs. Over the past 25 years, established food co-ops have used member-owner loans as an essential capital component in financing expansion/relocation projects.

Start-up food co-ops have also raised significant capital through member-owner loan programs.

Member-owner loans represent commitment and engagement in the co-op on behalf of its member-owners. While not provided by all members, member-owner loans are nevertheless a very strong indicator of member-owner buy-in and support for the proposed future direction of the co-op. Such investment illustrates that the member-owner values the co-op’s services and is willing to lend a sizable amount of money to the co-op, even when clearly understanding the risks involved. Member-owner loans typically range from $1,000 to over $50,000. Average size loans can range from $3,000 to $10,000.

Serving to leverage bank financing, member loans are a critical ingredient in the cooperative’s mix of assembled capital. Large conventional lenders like banks will be impressed by a co-op’s ability to raise member-owner loans. Financial institutions often view both member-owner loans and member-owner equity favorably, since both types of member-owner investment are subordinate to bank loans.

Member-owner loans can also be viewed as a bridge to member-owner equity. Member-owner loans are most often raised intensively as part of a start-up or expansion project and repaid over a 4 to 10-year period of time, as member-owner equity and profits slowly flow in to replace the member-owner loans.