Employee Ownership Financing Act

Increased Employee Ownership: The Employee Ownership Loan Program provides loans or guarantees to help entities purchase equity in companies to increase or establish employee ownership (Section 4(b)(2)(A)).

Support for Business Growth: Loans may be used to allow companies that are already at least 51 percent employee-sought to expand their operations and increase or preserve jobs (Section 4(b)(2)(A)(iv)).

Protection Against Plant Closings: When an employer plans a permanent shutdown of a facility, they must offer the affected employees the opportunity to purchase that plant or company through an employee stock ownership plan or a worker-owned cooperative (Section 5(a)(1)).

Business Continuity during Negotiations: If employees and employers enter good faith negotiations to purchase a facility following a closing notice, the plant or company must remain open during those negotiations and for 30 days after the closing date (Section 5(a)(3)).

Workplace Democracy: Entities receiving loans must demonstrate a plan to establish systems for meaningful employee involvement in work-related decisions, which includes increasing workplace democracy (Section 4(c)(1)(D)).

Financial Risk of Bankruptcy: Loans or loan guarantees made under this program may be subordinated to the interests of current and former participants in an employee stock ownership plan or worker-owned cooperative if the Director determines it is appropriate during a bankruptcy (Section 4(b)(2)(C)).

Strict Requirements for Loan Approval: To receive support, entities must undergo rigorous preconditions, including submitting business plans, establishing specific board structures, and providing independent third-party studies on market valuation and cash flow (Section 4(c)).