Securing financing for your co-op is a key step. Of course members are a key source of capital, however rarely do members have all the financial resources required. This means that securing additional capital from others is usually a necessary part of co-op start-ups.
There are many different types and sources of financing and each source will require specific information about your co-op to determine whether or not they will provide the co-op any money. The co-op will also have to agree to specific requirements and conditions to receive the money. The following are some key resources that provide financing to co-operatives:
- Co-operative lending and equity investment (CCIF)
- Canadian Alternative Investment Co-operative
- Tenacity Works Fund (Canadian Worker Co-op Federation)
- Capital Guide for Worker Co-ops (CWCF)
**IMPORTANT UPDATE re: RRSP program, March 2012: as a result of changes recently made to the rules governing RRSPs, it is possible to use this program only where the individual plan-holder holds less than 10% of the value of each class of shares in a co-operative. Investments in co-operatives and business corporations for an amount of 10% or more of shares were previously allowed, but have been declared “prohibited investments” in order to make it more challenging for individuals to engage in tax avoidance. All of the RRSP information below should be read in light of the fact that this applies only where investors will each own less than 10% of each class of shares.**