New state funding could help struggling rural businesses achieve employee ownership

A new grant is making it more financially feasible for retiring owners to pass their business on to their employees. 

The partnership between Rocky Mountain Employee Ownership Center and the Colorado Office of Economic Development and International Trade will assist 12 rural businesses by covering 50% to 100% of the cost of technical assistance for converting to an employee-owned structure. 

The $200,000 grant from the Colorado Office of Economic Development and International Trade will be divided into $15,000 per company. This is in addition to the department’s existing tax credit, which covers 50% of out-of-pocket expenses during the employee ownership conversion.

The opportunity was created since, as more baby boomers retire, many rural businesses struggling to find suitable buyers are at risk of closing. Less than 20% of businesses put on the market are sold and only 15% are passed on to family members.

The grant seeks to address the unique challenges faced by rural business owners, many of whom lack a succession plan or knowledge of how to transition to employee ownership.

Companies must be located in designated rural counties and agree to sell at least 20% of their business to three or more employees to qualify for the funding. Qualifying business owners can fill out an application online at TinyUrl.com/employeeownedco.

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