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Corey Rosen

Corey Rosen

SBA Says Main Street Employee Ownership Act Has Not Produced Many ESOP Loans

The 2018 Main Street Employee Ownership Act was intended to spur lending from the Small Business Administration for ESOP transactions. While the law seemed very clear that ESOPs should be eligible for  the SBA’s 7(a) lending program (a program that allows borrowers to get loans through SBA approved lenders rather than having to navigate the more cumbersome process of going to the SBA directly), SBA guidance on the Act excluded ESOPs from the program, as well as adding other requirements for equity in the deal and a separate valuation, that have made the law cumbersome at best.

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Corey Rosen

How the California Employee Ownership Act Became Law

The passage of the California Employee Ownership Act, the provisions of which I discussed in a recent blog post, has lessons for anyone wanting to move employee ownership forward in a state. We often think of legislation as the result of lobbying efforts by well-funded and/or politically connected groups. But the California Employee Ownership Act was the result of one employee ownership advocate calling one state legislator (Senator Josh Becker) and explaining the benefits of employee ownership in closing racial wealth and equity gaps in California. Senator Becker, coming from an entrepreneurial background, grasped the idea immediately and asked what he could do to promote more employee ownership in California. With his staff, he set up a meeting with a group of worker coop and ESOP advocates (including the NCEO) to come up with ideas. That group recruited additional supporters, and once the bill was drafted, these supporters lined up other supporters to contact their legislators (the NCEO was not involved in the lobbying part of this process). The bill moved through both houses without dissent. While the idea did not simply sell itself, it came pretty close.

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Corey Rosen

New NCEO Guides to State and Federal Legislation Available

The NCEO now has comprehensive guides to active and pending state and federal legislation on our website. The articles will be updated as needed. The state guide summarizes all the state bills that have become law, including creating state employee ownership centers, tax incentives for a sale to an ESOP, and allowing certain professional firms to organize as ESOP companies. The document also summarizes significant active legislative efforts. Links to the bills are provided where available.

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Corey Rosen

CHIPS Act Adds Employee Ownership to Manufacturing and Innovation Training Programs

Congress has passed HR 4346, the CHIPS Act (previously called the America Competes Act), which now heads to Presdient Biden for signature. The bipartisan bill is primarily designed to make it easier for American chip and other technology manufacturers to compete worldwide, but it also contains a pilot provision (Section 25B) that directs Manufacturing Extension Partnerships (MEPs) to provide awards for a variety of worker education and training programs, including employee ownership.

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Corey Rosen

House Committee Urges SBA to Fully Implement Main Street EO Act

On June 28, 2022, the House introduced HR 8254, which provides funding for a variety of government agencies, including the Small Business Administration (SBA). In a report accompanying the bill, the House Appropriations Committee urged the SBA to fully implement the Main Street Employee Ownership Act (MSEOA), which was passed in 2018 but has seen only limited use because the SBA-issued standard operating procedures directly undermine the intent of the Act. The report does not have legislative force, but such reports, coming from the committee that appropriates funds for the agency, are usually taken seriously. The report states:

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Corey Rosen

Using Skill Assessments to Improve Ownership Culture

At an NCEO Innovative Communication Coalition network meeting on July 18, communication team leaders from a number of NCEO member companies discussed how they use skill assessments. Lori Atone of TVF said they use the CliftonStrengths assessment (formerly StrengthsFinder) to increase self-awareness and understand their fellow employee-owners better. They create a grid that lists the top 10 strengths of each employee by name. The idea is to focus only on the positives, to help identify potential talents, and to make it easier to assemble well-balanced teams. They feel helping employee-owners contribute in a way that’s aligned with their natural strengths amplifies the employee ownership mindset and will increase engagement in a fun and meaningful way. Managers can use the results to help get people engaged in ways that “feel right to them” and find new paths for participation. Employees have responded to the idea very favorably.

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