Littleton Consumer Cooperative Society, Inc.

Member Loans

We are now at the cusp of being able to build the Co-op store. We have raised $4.5 million dollars in funding from banks, grantors and development lenders and $450,500 from individuals in the community. We have a site secured, a building designed and a firm price for its construction from a well respected Colebrook based contractor.

But we are still short by $45,000 of meeting our goal for loans from the community. We continue to seek members to provide member loans to help us achieve this goal. Please consider helping us now.

(For those members who are residents of Vermont - we have cleared the legal hurdles and can now accept your pledges too!!!!)

If you are unable to provide $1,000 or more in a loan please consider a donation or purchasing more shares. Please note that your contribution is intended as a community match for the CDBG grant.

The Member Loan Prospectus is below. Please email us at loans@littletoncoop.org for more information or to initiate a pledge for a loan or a contribution.

Littleton Food Co-op
Member Loan Prospectus
April 3, 2008

What Is The Goal?

The Littleton Food Co-op ("Co-op") has introduced this program in order to raise up to $500,000. Loans are expected to range from $1,000 to $50,000, with an average loan amount of $5,000. These member loans are critical as they demonstrate community commitment and support to other lenders in order to secure total financing of $4.6 million.

What Are The Terms?

  1. The loans will earn simple interest at a rate determined by the loan amount. Loans of less than $10,000 will earn 4%, while loans of $10,000 or greater will earn 5%. Interest is accrued annually.
  2. The term of the loan is six years. Subject to the Co-op's compliance with covenants with banks and development agencies, the loan and accrued interest will be paid back in 3 payments on April 30th of 2012, 2013, and 2014. During 2009, 2010, and 2011, interest will be accrued but no payments will be made. The covenants are intended to protect the other lenders from members getting paid before they do, in the event that the Co-op is not a financial success.
  3. The minimum amount of money that can be loaned is $1,000. There is no maximum.
  4. The Co-op may elect to satisfy the loan before its due date.
  5. The Co-op will post audited statements yearly on its website.

What Are The Suitability Standards?

The Co-op must comply with Securities laws in arranging this loan program, so the following provisions apply:

  1. The program is open to individuals, businesses and corporations so long as they are members of the Co-op.
  2. All member-owners must be making the loan for their own account and not for resale. These loans cannot be sold, assigned, pledged, or transferred in any way other than by inheritance or bequest. This allows us to utilize an exemption from registration under securities laws.
  3. These notes are suitable for, and should only be considered by, those who understand the nature of the risks involved and can afford to assume such risks, to sustain a loss of their loan and have no need for liquidity in any funds loaned.
  4. Interest on these loans is taxable and will be reported with a 1099-INT.

What Are The Risks?

The Co-op project has been based upon sales estimates made by a nationally respected analyst with a long history of accuracy. The expenses have been projected based on the experience of other co-ops, principally the Hanover Co-op. By these calculations, the Littleton Food Co-op is expected to be profitable in its second year and be well able to service all its debt.

While we believe that the Co-op will be a success, there is risk associated with the venture. Secured lenders such as banks will have the right to be paid before members. Furthermore, some of our lenders will be restricting the right of the Co-op to pay principal back to its members unless the Co-op is clearly earning enough to service the debt it owes those senior lenders.

As with any investment, member lenders should be sure to fully understand the terms and risks associated with their loan and be prepared, in the worst case, to lose their investment.

How Do I Start The Process?

If you want to make a loan, please complete the pledge form (Non-Binding Commitment). This will allow you to pledge a certain loan amount to the Co-op. Please let us know how much you will be lending and when you expect to do so. As soon as we receive your pledge form, we will send you a Lender's Agreement (Binding Commitment Letter) along with instructions to help you fill it out.

If you want to support the Co-op for less than the minimum loan amount, please consider contacting us to discuss an increase in your member equity (up to $2,000).

Please mail the pledge form to:

Littleton Consumer Cooperative
P.O. Box 377
Littleton, NH 03561

If you have questions on this program please contact:

In Conclusion.....

This is an opportunity for you to further help the Littleton Co-op build its grocery cooperative - an effort that will not only provide high quality food at a fair price, but will provide an outlet for local products, create new jobs, and grow the local economy.

We hope you will consider this community oriented investment.

Littleton Consumer Cooperative Society, Inc. ®2007
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