Virginia Food Co-Op Receives $950K Loan From National Cooperative Bank

National Cooperative Bank (NCB), a financial institution dedicated to providing banking solutions to cooperatives and socially responsible institutions across the United States, has extended a $950,000 SBA 7(a) loan to Lovettsville Cooperative Market, a member-owned food co-op in Lovettsville, Va.

The market, which now has more than 1,200 member owners, opened this past Nov. 1. The co-op will purchase from local farmers as much as possible, implement environmental best practices and strive to build an inclusive community while providing information about the link between food and health.

[Read more: "Impact Report Shows How Food Co-ops Help Communities"]

“New startup food co-ops can be difficult,” noted Dami Odetola, VP at Arlington, Va.-based NCB. “The co-op has had great support of the community and has worked hard since 2011 to make the opening of the co-op a reality. We look forward to continuing our support of Lovettsville and their commitment to their community.” 

“National Cooperative Bank is focused on serving the needs of food co-ops, as it is critical to the mission of the bank,” a spokeswoman for the organization told Progressive Grocer via email. 

According to the spokeswoman, the Lovettsville Co-op approached NCB In 2015, which advised them on what they needed to do to become bankable. The conversations continued until the loan became a reality in November 2023.

The overall structure of the term loan is as follows:

• The loan proceeds were used to finance the buildout of the leased space and for the purchase of equipment for store development.
• The term is for up to 132 months, with the first 12 months being interest only, followed by consecutive monthly payments of principal and interest (P&I) to fully amortize the loan.
• The interest rate is fixed at Wall Street Prime plus SBA allowable margin.
• The loan is secured by a first lien on all assets of the co-op and will be fully guaranteed by a corporate affiliate – Lovettsville Market LLC and 75% by the SBA.
• The guarantor pledged a predetermined percentage of the loan amount to secure the guaranty.
• All member loans are subordinated to the bank and will be unsecured.

In other recent cooperative grocer news, residents of the Dorchester neighborhood in Boston are now able to join a grocery co-op specializing in healthy foods. The 6,000-square-foot  Dorchester Food Co-op at 195 Bowdoin Street opened on Oct. 14 and is the only community- and employee-owned business of its kind in that market.