Arlington, VA (June 17, 2020) National Cooperative Bank (NCB), a leading financial institution dedicated to providing banking solutions to cooperatives and socially responsible institutions nationwide, is pleased to announce the closing of a $1.4 million SBA 7(a) loan to Fredericksburg Food Cooperative, part of the $4.1 million project for the development of a new 10,000 square foot full-service natural and organic retail food store located in the Lee Plaza Center in Fredericksburg, VA.
As a consumer owned food co-op, access to SBA financing was limited due to a personal guarantee requirement. With a robust advocacy initiative and dedication from NCB and the leadership at the Fredericksburg Food Co-op, SBA approved a scenario where the food co-op could access the government program.
A special purpose entity, Fredericksburg Food LLC, was created to serve as the corporate guarantor on the facility and will be pledging a minimum of $150M cash collateral held at NCB, to further secure the loan.
“We are grateful to NCB’s staff and board for their support of our Fredericksburg Food Co-op”, stated Board Member Richard Larochelle. “We appreciate NCB’s talented team who worked tirelessly with us to make this loan approval possible. And we appreciate that the Small Business Administration provided a guarantee of this loan — the first of its kind to a food cooperative. Thanks to NCB’s loan and the $2.7 million that is coming from our co-op owners, this dream of a community-owned food co-op is now becoming a reality for Fredericksburg Virginia.”
“We are so excited to be teaming up with this great cooperative lending organization to continue spreading the co-op business movement and bring cooperative groceries to the Fredericksburg community”, stated Chris Roland, General Manager of Fredericksburg Food Co-op.
The Fredericksburg Food Co-op which now has over 1,430 owners was incorporated in September 2015 and will open later in 2020. The co-op will purchase from local farmers as much as possible, implement best environmental best practices, work to build an inclusive community that welcomes all while sharing information the link between food and health.
“New start up food co-ops can be difficult”, stated Dami Odetola, Vice President at National Cooperative Bank. “The leadership at Fredericksburg Food Co-op and the dedication of their volunteers is unprecedented.They have great support from the community and we look forward to the grand opening of the new store.”