We work with the field to collectively leverage this unique moment in time to significantly advance employee ownership
With all the talk about economic recovery in Washington D. C. and state houses across the country, shouldn’t employee ownership be up front and center in our public programs and policies? We think so!
Project Equity is working with our peer organizations in the fields of employee ownership, quality jobs, and socially responsible business to collectively leverage this unique moment in time to significantly advance employee ownership.
A big tent approach that prioritizes awareness
From a policy perspective, employee ownership has the distinct advantage of being one of the rare strategies that appeals across the political spectrum. It is also a win-win approach to business, with models appropriate for businesses of all sizes, and public policies and programs that every level of government can implement.
In our partnerships with local governments and our state and national policy work, we advance proven approaches through which federal, state and local governments and government-funded programs can support employee ownership:
- Educate agency staff who oversee economic development, business and labor programs about the silver tsunami of retiring business owners and the employee ownership solution, including the full spectrum of broad-based employee ownership. Read about ESOPs, worker cooperatives and Employee Ownership Trusts.
- Fund awareness programs about succession planning and all forms of broad-based employee ownership, aimed at business owners, their advisors, lenders and business-serving nonprofits
- Subsidize employee ownership feasibility assessments
- Remove real and perceived barriers to employee ownership, such as the default practice of requiring individual guarantees on loans to cooperatives
Get involved today
Several current policy opportunities are advancing one or more of these strategies. Here are some ways you can learn more and get involved.
State Small Business Credit Initiative (SSBCI)
The State Small Business Credit Initiative (SSBCI) will send $10B in federal dollars to the states to support small businesses in the coming months. Thanks to advocacy from the employee ownership community, SSBCI funds can be used to support transitions to employee ownership. But this opportunity requires active support from employee ownership champions and also requires educating state agencies that are administering SSBCI, and engaging business owners, employee-owned companies and capital providers to participate in these new programs.
The Capital for Cooperatives Act
The Capital for Cooperatives Act has been introduced in both the House and the Senate. This important bill would address, once and for all, a longstanding barrier to the growth of cooperatives in our country: the requirement by most lenders that all co-owners in a cooperative personally guarantee the loan. Experienced lenders have been making successful loans to cooperatives and nonprofits for years without individual guarantees, instead using other effective underwriting methods. Not only are individual guarantees unnecessary to ensure a sound investment – they cut coops off from most small business financing sources. The Capital for Cooperatives Act will level the playing field.
California Employee Ownership Act
Project Equity, Worker-Owned Recovery California (co-founded by Project Equity and other California-based worker ownership advocates in 2020) and Ownership America are co-sponsoring the California Employee Ownership Act. Senator Josh Becker introduced this groundbreaking bill in April 2022. Read about the bill and contact the WORC coalition to get involved in supporting it.
Every state has one or more state agencies that are preparing to receive significant capital for small businesses through SSBCI. We encourage employee ownership advocates to reach out to the relevant agencies in their state to educate them about employee ownership.
City and County governments around the country are supporting employee ownership. Project Equity’s local government partnerships include the cities of Berkeley, San Francisco, Long Beach and Los Angeles, as well as LA County and Miami-Dade County. Learn more about our city partnerships:
View data studies that we’ve created with local government partners to illustrate the effects of the small business closure crisis.