Financing a portion of our expansion costs internally will strengthen Mariposa by reducing our reliance on bank loans, allowing for a stronger cash flow position in the first critical years of operation after the move, and offering our members a meaningful way to participate economically in the cooperative that we own.
Our goals in seeking these member loans are to:
- Raise at least $300,000 dollars
- Reduce our costs of borrowing from conventional lenders
- Involve members closely in the financial health of the co-op
What are the terms?
Loans above $1000 will earn interest. Members can contribute smaller amounts by increasing their member capital. The loans will bear an interest rate of 3%, at five or 10 year terms—competitive with bank CD returns. Once a promissory note is issued, the interest rate is fixed for the full term of the loan. Interest accrues on a simple (not compounded) basis.
How do I make a loan?
Mariposa offers participation in the member loan program to all members who are current in their equity payments and who are permanent residents of Pennsylvania. Fill out and return a member loan interest form to receive the Member Loan Information and Application Packet, which describes the loan program in detail, and provides financial reports and projections, loan terms, and the benefits and risks involved in participating. All potential lenders must consider the information in this packet before making a loan.
Is there risk involved?
While we believe our expansion will be successful, there are risks involved. Loans to the coop should only be considered by people who understand the risks, can afford to assume these risks, have adequate financial means to sustain a loss of their loan, and have no need for liquidity in any funds loaned.
