Loan FAQ
Q. What are Owner Loans and who is eligible to give a loan?
Only Illinois-based Dill Pickle Owners are eligible to make an interest-earning loan to the co-op. For each loan, a legal agreement that specifies interest rates and pay-off schedules will be created.
Q. Why are Owner Loans beneficial to the Dill Pickle?
Owner loans are critical to helping the Dill Pickle grow. They contribute to the necessary working capital that helps ensure the co-op is in a good financial position to achieve its desired impact. The Dill Pickle has successfully secured loans from dedicated owners to help fund our initial store on Fullerton, our expansion to Milwaukee Avenue, and to provide necessary capital to weather challenging periods. Owner Loans involve lower interest rates and longer terms than commercial loans. They significantly reduce debt service which frees up working capital for the co-op to use to grow. Owner Loans are viewed as collateral by our institutional lenders and will help us continue to secure more favorable terms for our institutional loans.
Q. What are the terms of a loan?
The terms of a loan are decided between the lender and the Dill Pickle, and include the length of the loan (number of years), the size of the loan (the amount lent), and the rate of return of the loan (the annual interest rate). The Dill Pickle Board sets ranges for these parameters from which the lender can select the desired loan criteria. Please contact board@dillpickle.coop for more details on current loan parameters.
Q. Is there a minimum or maximum loan?
The minimum size of a loan is $1,000. There is no current maximum loan size.
Q. How is interest compounded?
Interest is not compounded. Simple interest will be earned for the life of the loan.
Q. How are Owner Loans paid back?
Like any loan, Owner Loans have maturity dates and interest rates. The principal and earned interest from each loan will be paid out at maturity after a review by the Dill Pickle Board to assure sufficient cash flow and solvency.
Q. Are the loans risky?
Loans provided to the Dill Pickle are unsubordinated and do entail specific risks. Please request a copy of our loan prospectus for more info and feel free to reach out to board@dillpickle.coop to discuss specific details.
Q. How do I make an Owner Loan?
The first step is to request an owner loan prospectus. After reviewing the materials, complete the required documents or email board@dillpickle.coop to schedule a time to discuss an owner loan. Full payment is due with the signed paperwork in the form of a check or ACH Payment to Dill Pickle Food Co-op. Paperwork may be mailed, emailed, delivered, or picked up per the instructions in the Loan Prospectus.
Q. Can an owner provide multiple loans?
Yes, an owner can provide multiple loans.
Q. If I move, what happens to my Owner Loan(s)?
No problem. Your primary residence only has to be in Illinois when the investment is made. Notify the Dill Pickle of your new address or any other updates in contact information by emailing board@dillpickle.coop and we will continue making sure you get up-to-date information about your investment after your move.
Q. Does providing a loan to the Dill Pickle grant me any special rights or privileges?
Owners who choose to lend to the Dill Pickle are tremendously important to the success of our co-op, however they are not entitled to any special treatment, rights, or privileges (outside of the repayment of their loan) that other owners are not.
Q. How do owner loans compare to other debt that the co-op has utilized?
The Dill Pickle has financed the store thanks to the generosity of owners who have provided equity, loans, or both. Additionally, the co-op has secured loans from other community and institutional lenders that have helped our co-op get to where we are today. We thank all our lenders for their commitment to our cause! Please note that the loans to our owners are subordinated below the loans to our institutional and community lenders.
Q. Current Loan Situation
The Dill Pickle does not have an ongoing campaign, but loans continue to be important to maintain healthy working capital for the co-op and are always accepted. To help preserve cash during the current financially challenging times, the Dill Pickle Board has suspended loan repayment except in cases of financial hardship. The Dill Pickle Finance Committee has established financial metrics that will enable the co-op to begin repaying loans as conditions improve. Please reach out to board@dillpickle.coop for more details.