Seed Commons provides cooperative businesses with the financial support they need, but Seed Commons is itself a cooperative—we are governed by our member local loan funds.

Early in our history, we realized that we couldn’t scale our model of nonextractive finance if we were making all decisions about lending out of a central office somewhere far away from the communities we wanted to work with. A traditional lender can do this—they use a checklist of things like credit scores and bank account balances to assess how worthy of credit a borrower. Not only are these measures abstract, they are also fundamentally flawed: they can exclude too many people who haven’t been born into the kind of economic and racial privilege that make perfect credit scores and significant personal assets more likely. 

Our model for finance works at the speed of trust instead. We assess the potential of a cooperative that needs financing not just based on business plans and financial statements, but on the real skills and commitment that the worker-owners are bringing to the table. Our first major US loan—to the New Era Windows Cooperative—was made because we had the honor to get to know the workers who had occupied their previous factory twice in three years. We saw the passion they had for each other’s well-being, and their collective willingness to fight for the workplace they deserved—and we knew that over the long haul that if they had the financial support they needed to buy the equipment they needed to open their own factory, they would be extremely likely to thrive as a cooperative business. 

But we couldn’t replicate that kind of deep trust building at scale with a small staff based in New York. That’s why we’ve built Seed Commons as a cooperative network—our local member loan funds are embedded in their communities. Each one is unique—but they don’t look like your traditional financial institutions. Instead, each is staffed and governed by community organizers, solidarity economy innovators, and by workers from the local cooperative ecosystem itself. It’s these local institutions that decide what investments make sense, based on their deep knowledge of their own communities, and the relationships they build with the workers and community leaders behind the projects they partner with. 

This structure makes better and more inclusive loans because it distributes decision-making power democratically—but by giving our local members a shared cooperative infrastructure working for and with them at a national scale, it also helps level the playing field for these funds and the local cooperative businesses they support. Collectively, the economic power aggregated in Seed Commons is more than the sum of its parts—the scale of our combined fund, diversified across many different sectors, builds cooperative power in the market for capital that an isolated worker cooperative could never command.

How it works

Local member funds bring potential projects to our cooperative board’s sustainability committee to access investment dollars from our network-wide fund. Once they’ve demonstrated a capacity to make viable local loans, they are invited to join as full members and become a part of the cooperative governance of the whole network.

This is how we are not just making loans or helping co-ops, but building infrastructure for a non-extractive economy. The Seed Commons network provides:

• Common capital. We are able to approach potential investors with the opportunity to support a diversified portfolio of cooperative projects across the country, unlocking capital at scale for our local members. 
• Shared learning. We work intentionally, as a network, to support our peers as they develop their local capacity to foster development of the cooperative economy, and create opportunities for cross-cutting sector-by-sector learning across funded projects.
• Backend support. We provide an economy of scale for our peer funds with central back-office services  

Interested in learning more about our peer network? Get in touch.