Cooperation New Orleans Loan Fund is
a community-based loan fund that provides technical assistance, business development, and non-extractive capital to worker-owned cooperatives. Instead of traditional financing based on personal credit history and collateral, our loan fund is based on deep community relationships and our mutual interest in resourcing worker-owned businesses that meet community needs. We see our loan fund as a tool to build a mass worker-led movement for a cooperative New Orleans.
Before we can understand what it means to be non-extractive, let’s talk about what extraction is. Extraction is when something is taken, especially by force. Under our current capitalist system, resources are extracted from the Earth, labor is extracted from workers, profits are extracted from the people, sacred space and history and cultural staples are extracted from communities. The people extracting from us gain more power, leaving us and the planet void of the nutrients we need to survive. What little is given to us does not make up for what is taken from us.
In a traditional lending system--like getting a loan from the bank for your home or small business--high interest rates, credit, and discriminatory factors are used against people to benefit the lender. This style of lending is extractive, because the person borrowing has to risk losing everything, and always has to pay back more than they are receiving.
We believe that everyone should have access to the resources they need to realize their ideas. You should not have to engage with predatory lending to afford to start a business. Our Loan Fund offers Black worker-owned cooperatives non-extractive loans, which are designed to never take more from the borrower than they can afford. Loans are paid back only when a profit has been made from borrowed funds, when the cooperative earns more than they are spending, and when making loan re-payments will not harm the business. Unlike traditional loans, we will never ask you to risk your personal assets like your home or your car. These loans are made by us and for us to meet our own needs. We do this work through the help of Seed Commons, a community wealth cooperative that funds and supports community loan funds like ours across the country.
How does it work?
While every business is different, there is a basic flow to how the Cooperation New Orleans Loan Fund works with cooperatives seeking technical assistance and financing for their business. Explore the stages below.
After a co-op fills out the loan fund inquiry form, one of the Loan Fund team members will follow up to collect more information or set up an intake meeting. We typically work with projects that have at least two, preferably three, people committed to the idea of making this business a cooperative. Alignment with our values is also important.
If there is alignment with our values, we next bring the business to our local steering committee with recommendations of how to best support the project within our current capacity. Sometimes this looks like technical assistance around collective decision making or cooperative development. Sometimes it might be working with the cooperative to prepare a loan application to Seed Commons--the national community wealth building cooperative of which we are a peer loan fund member.
If the co-op is seeking a non-extractive loan to finance a part of their business, we will develop a work plan with the business to get them loan ready. This can take anywhere between 2 months to a year to bring the loan memo forward to the Seed Commons national sustainability committee, which approves loans based on values alignment and productive sustainability of the business.
4. Once a loan is approved, our work together continues! Loan Stewards provide ongoing technical assistance and support to ensure the success of the cooperative.
The Loan Fund has secured financing for three cooperative business:
Pagoda Cafe, a cafe located on the historic Bayou Road
Flippin Birds Food Truck, a chicken mobile food truck parking primarily in the Central Business District, at hospitals, and universities
Keep it in the Culture, a multi-purpose space selling masking supplies to Mardi Gras Indians.
While all of these cooperatives operate from the same values, their paths to being cooperatives differ. Pagoda existed as a privately owned business for several years prior to being purchased by the employees with the help of our Loan Fund. Flippin Birds is a new business that used the Loan Fund for start-up costs. Keep it in the Culture began their journey with the Loan Fund from an idea phase.
In addition to providing an alternative way to finance small businesses, the loan fund also offers technical assistance. That can include support with accounting, marketing, website development, social media management and other business services, as well as assistance with pivoting to address operational needs and a changing business environment. Even if a cooperative is not interested or eligible in securing a loan, we may still work with cooperatives providing technical assistance, such as our relationship with Birthmark Doula Collective.
We are also working with other businesses and various stages of development, including Urban Dreams and Watch the Waistline. We plan to continue sharing information about our loan fund as a potential resource and pathway to strengthening our cooperative ecosystem.
Read more about other cooperative businesses across the country funded by Seed Commons.
The Pagoda Cafe team at their 10-year & Worker ownership celebration
Photography by Lush Budoir
Our Loan Stewards
Read more about our stewards here!