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| Member Loan FAQs |
1. 
What is the member loan program?
| As a co-op we have a unique way to fund any large project of the store. The members loan money to the co-op to finance part of the project. This is a loan and not a donation so the money is to be repaid plus any interest that the member elects to receive. |
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2.
How much money do we need to raise in member loans?
| The total amount of capital needed is $1,000,000. A little more than half of that needs to be in the form of member loans. |
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3.
Why does the co-op need this money?
| This is a big project. We have costs including inventory, renovation, leasehold improvements, staffing, and equipment; and we’ll need to meet all local building and health code requirements. |
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4.
How do we know we need this money and that we can pay it back?
| The board of directors, working in conjunction with an organization that has helped most of the co-ops in the country, has developed a detailed financial plan. This spreadsheet budgets costs for all of the details associated with this project. It also shows sales projections for the next ten years. There are more details in the Offering Memorandum. |
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5.
Why don’t we just borrow the money from banks?
| We will be borrowing some money from local banks and cooperative funds, but banks typically don’t lend money to a business unless the owners also have a big financial stake. We are the owners and so we demonstrate our commitment through these loans. Food cooperatives all over the United States routinely use member loans to provide this additional member-owner capital. |
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6.
What is the minimum loan amount?
| $1,000 is the minimum. To help us reach our goal we are looking for an average loan size of $5,000. |
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7.
Why is there a minimum?
| We have to raise a lot of money. Each of the loans will require a fair amount of paperwork and on-going administration. If we have a lot of small loans, it makes bookkeeping and reporting more challenging. |
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8.
What interest rate will the loans pay?
| We can offer modest interest rates. You get to choose an interest rate from 0% up to 3%. Choose the lowest rate you can afford to keep your co-op’s costs as low as possible. Don’t think of this as just a monetary investment with a competitive rate of return. It’s an investment in your community with even greater, long-term returns. |
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9.
How long are the loans for?
| We need loans that are paid back in 4, 5, 6, 7, 8, 9, and 10 years. You can choose which year you want your loan paid back in. We have to evenly spread the loans across each of these six years, so once a year is filled up we can’t accept any more loans for repayment in that year. |
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10.
Why can't I loan money for a shorter time?
| Since the bank loans are more expensive than the member loans the financial plan focuses on repaying them first. Once the bank loans are repaid we start repaying the member loans. |
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11.
I can't wait! How can I sign up now?
| That’s what we need to hear! You need to read the Offering Memorandum in detail. Call or email Jeanne Cook (jmcook@mchsi.com) to let her know how much you want to loan, what interest rate you need, and how long the loan will be for. We’ll write up contracts and send you the paperwork. Everything can be done by mail. It’s quick! It’s painless! It’s a great way to invest in your community! |
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| Class C Stock FAQs |
1.
What is Class C Stock?
| Class C Stock is a way to purchase additional, non-voting shares in Harvest Moon. It pays dividends that will accrue annually at 5.75%. Dividend declarations will be at the discretion of the Board of Directors, and dependent upon financial conditions. |
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2.
How much money do we need to raise in class C stock investments?
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3.
Why does the co-op need this money?
| Member investments in class C stock are carried on our balance sheet as additional member equity, and this helps us to leverage the bank debt without carrying the additional liability. |
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4.
How do we know we need this money and that we can pay it back?
| As with the member loans, the board of directors, working in conjunction with an organization that has helped most of the co-ops in the country, has developed a detailed financial plan. This spreadsheet budgets costs for all of the details associated with this project. It also shows sales projections for the next ten years. There are more details in the Offering Memorandum. |
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5.
What is the minimum class C stock investment amount?
| At this time the board has determined that 100 shares of $100, or $10,000 is the minimum. This is long-term investment and the board believes that individuals able and willing to invest in class C stock need to be comfortable with this minimum and an undetermined length of investment. |
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6.
What dividend will a class c stock investment pay?
| We are offering dividend rates on Class C Stock of 5.75%. Don’t think of this as just a monetary investment with a competitive rate of return. It’s an investment in your community with even greater returns. |
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7.
I can’t wait! How can I sign up now?
| That’s what we need to hear! You need to read the Offering Memorandum in detail. Contact Jeanne Cook (jmcook@mchsi.com) to let her know how much you want to invest. We’ll write up contracts and send you the paperwork. Everything can be done by mail. It’s quick! It’s painless! It’s a great way to invest in your community! |
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8.
More questions?
| Contact any Harvest Moon Board of Directors, (612) 435-2210 or info@harvestmoon.coop |
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