Explore the various financing programs that are available for co-op conversions.
Employees’ capital outlay
At first glance, you might assume that most employees don’t have access to the kind of capital outlay required to acquire a company. Collectively, however, workers have access to greater investing power as well as specific programs for financing. For instance, employees can obtain loans toward a capital outlay that can be repaid through salary deductions.
- The Programme de soutien à la reprise collective s Quebec’s financing program intended for collective employee buyouts (up to $1 million over 3 years to support the costs of a feasibility study and the founding of worker cooperatives to undertake collective buyouts.
- Employment subsidies from Emploi Québec (Subvention salariale)
- Social economy investment funds
Loans and loan guarantees
- Loans for technical support related to the feasibility study (not refundable if the co-op conversion is not undertaken for any reason)
- Line of credit
- Start-up loans
- Patient capital (quasi-equity)
Financial benefits for the buyers/acquiring parties
- Access to the cooperative investment plan (Régime d’investissement coopératif (RIC)), a Quebec government program allowing for 125% provincial tax deductions for employee co-op members towards their purchase of preferred shares in the acquired company.
- Registered Retirement Savings Plan (RRSP) tax credits, both federal and provincial, equal to 100% of the amount invested in the company – can be added to the provincial benefits of the RIC (see above).
Financial backers for cooperatives
- Caisse solidaire Desjardins (www.caissesolidaire.coop, French only)
- Fiducie du Chantier de l’économie sociale (patient capital financing) (www.fiducieduchantier.qc.ca, bilingual)
- Filaction (https://filaction.qc.ca/, French only)
- Fondaction CSN (www.fondaction.com, bilingual)
- Fonds de solidarité FTQ, and its local and regional funds (www.fondsftq.com, bilingual)
- Fonds Essor et Coopération – Capital régional et coopératif Desjardins (capitalregional.com, bilingual)
- Investissement Québec (Cooperative buyout support program, www.investquebec.com, bilingual)
- Réseau d’investissement social du Québec (RISQ) (www.fonds-risq.qc.ca, bilingual)