As major companies issue IPOs and apply for large commercial loans, a local food co-op is taking a more modest approach to investment.

The Kensington Community Food Co-op is set to begin a campaign to solicit financial loans from its 560 members to help pay for the construction of its storefront location at the intersection of Frankford, Coral and Lehigh — a juncture that sits roughly at the center of Kensington.

The campaign will begin October 1 and run for a full month. The details of the campaign were announced last Sunday at the co-op’s bi-annual membership meeting, which took place inside the unfinished storefront.

The co-op has been growing its membership without a physical location for over five years.  Now, after months searching for a location, it’s turning to members to pay for the costs of refurbishing the storefront, a former restaurant and bar, into a fully-stocked grocery store with an on-site cafe that serves beer. The goal is to draw $400,000 in loans from members.

“These loans are not donations, gifts or grants. The loans are legal contracts between the co-op and our members that have defined repayment terms and offer a modest interest return on the member’s investment,” said Thom Berg, a board member and planning committee member who is running the campaign.

In addition to the equity from member shares purchased when joining the co-op, Berg said that equity, together with the member loans should account for 30-40 percent of the project’s costs.”The rest will come from outside investors, which are more likely to invest if the co-op shows buy-in from members through the loan campaign, according to Berg.

“Weaver’s Way, Mariposa and Creekside Coops have all run successful member loan campaigns in the past, to name a few,” he added.

The offering is limited to only KCFC’s membership who are residents of Pennsylvania. 

As for a timeline, the investment phase will in large part determine when the co-op opens its doors, and this depends on how much the co-op’s member-investors are willing to commit.

“It’s a way for the membership to get financial ownership in the co-op and a way for them to help support us,” Berg said.