A collaboration of two national organizations drives a $5M investment from the Quality Jobs Fund
Check out our media coverage:
- Yes! Magazine – Converting Business to Cooperatives Just Got Easier
- Next City – New Partnership Wants to Push Employee Ownership Closer to Mainstream
- Long Beach Business Journal – Growing Long Beach: New Initiative Aimed at Business Retention, Employee Ownership
LONG BEACH, CALIF., SEPTEMBER 05, 2019 – Project Equity, a national leader in the movement to harness employee ownership to maintain thriving local business communities and address income and wealth inequality, and Shared Capital Cooperative, a national CDFI loan fund that provides financing to cooperative enterprises, today announced the launch of a new collaborative initiative, Accelerate Employee Ownership.
Accelerate Employee Ownership supports the sale of businesses to their employees by retiring business owners, and was seeded with a $5 million investment from the Quality Jobs Fund. It helps ensure that small businesses, their jobs, and their local economic impact are retained in communities and that workers have quality employment and career advancement. Full details will be discussed at a public launch event on Thursday, September 5, 2019. See our FAQ page.
This innovative initiative provides pre-to-post transactional support for Employee Stock Ownership Plans (ESOPs) and worker cooperative transitions, paired with tailored, flexible and affordable financing. It is one of the most comprehensive efforts in the country to boost employee ownership, creating a path to business ownership for individuals in low to middle wage jobs.
Generating quality jobs
The Quality Jobs Fund, a collaborative project of the New World Foundation and the Federal Home Loan Bank of San Francisco, selected this integrated approach for investment, understanding the emerging small business closure crisis (the ‘Silver Tsunami’) as well as the unique opportunity this presents for families and communities primarily in California, Arizona, and Nevada, along with select national opportunities. “We clearly see the looming threats, but we also know that there are viable solutions,” said Noah Bernstein, Senior Program Officer of the Quality Jobs Fund. “Conversion to employee-owned businesses will contribute to reversing the job loss cycle, protect jobs, build local equity, and create renewed entrepreneurial opportunity for workers and companies.”
Greg Seibly, President and CEO of FHLBank San Francisco, said that fortifying the financial security of working families is needed to increase the pool of potential homebuyers. “This groundbreaking initiative will increase economic opportunity and provide direct economic benefit to hardworking families.”
Berkeley and Long Beach at the Forefront
In Northern California, Adams & Chittenden Scientific Glass, a twenty-five-year-old Berkeley-based manufacturer of specialized laboratory glassware, decided to transition their company ownership to their employees. They were the first California small business that financed the sale of the business to the employees with a loan through Accelerate Employee Ownership.
With today’s announcement, the City of Long Beach is highlighted as the first Southern California city to engage with this initiative. According to research by Project Equity, Long Beach is home to 2,500 small businesses that have been in operation for 20 years or more. “As their owners retire, their businesses are at risk of closing, causing job losses or out-of-area business transfers,” said Alison Lingane, co-founder, Project Equity. “We have partnered with the City of Long Beach, LISC-LA and Citi Community Development to retain legacy businesses and jobs. Accelerate Employee Ownership offers assistance and financing for Long Beach businesses transitioning to employee ownership.”
The future of small business
According to Christina Jennings, Executive Director of Shared Capital Cooperative, in order for employee-owned businesses to grow and thrive, they need access to capital and assistance that is tailored to the transition. Shared Capital has a 40-year successful track record. “This collaboration to create employee-owned businesses is helping to build wealth in communities and create a more just and inclusive economy.”
Shared Capital Cooperative
Federal Home Loan Bank of San Francisco
New World Foundation