DENVER, CO– The House Business Affairs and Labor Committee today passed HB21-1241, sponsored by Representatives Daugherty and Lynch, which would improve the state’s program that facilitates business conversions to employee-owned corporations by opening it up to more businesses. The vote was 11-2.
“Employee-owned businesses create jobs, boost employees’ wealth, and typically pay higher wages and salaries,” said Rep. Lindsey Daughertey, D-Arvada. “With this bill, we’re making it easier for businesses that want to convert to employee-owned to do so through taking advantage of Colorado’s Employee Ownership Revolving Loan Program. There’s no reason a business should be forced to close when ownership wants to sell and employees are ready and eager to take it over and keep it going.”
The Employee Ownership Revolving Loan Program provides financial assistance to businesses looking to convert to employee-owned. HB21-1241 extends this program and makes critical changes to ensure more business, and thus their employees, can benefit from the program and follow through on their desire to convert to employee-owned. Employee-owned businesses often grow faster, provide greater job stability, and are better positioned to withstand an economic downturn. The over 50,000 employee-owned businesses in Colorado employ nearly 420,000 people and have retained a greater number of workers during the pandemic.
HB21-1241 would allow the Office of Economic and International Trade the flexibility to change eligibility criteria for businesses applying for the Employee Ownership Revolving Loan Program to allow more businesses to apply. It would allow businesses to enter into employee-ownership agreements with less than 50 percent of its employees, which is more in line with industry standards. It also allows the funds to go directly toward the purchase of the business by employees, increasing access to capital for employees to start the conversion process.