USDA Policy Change Supports Worker Ownership

In a December 12 blog post, the US Department of Agriculture announced a new program to support the conversion of businesses to worker cooperatives and ESOPs. As of August, the Business & Industry (B&I) Guaranteed Loan Program can provide financing for a transaction.

The blog post describes a major aspect of this policy change: "Under the previous B&I rules, loans for purchasing businesses with a B&I guarantee required complete ownership transfer so that the selling owner retains no financial or ownership interest. This requirement made it difficult for the employees to take on such large loans and did not permit the selling owners to stay involved for transferring the know-how for running the business."