It's a good example. It's a classic example of what we said earlier about almost normalizing this structure, called the co-op structure, within the financial sector. There seems to be such ambiguity about the decision-making process and how decisions are made within co-ops that traditional banks or lenders, and even some statutory government boards, such as the BDC, because of their unfamiliarity with the decision-making process, may feel that there is more risk attached to it.
If a business, as you've just expressed, comes to us for financing, we focus on two things. One is the viability of that business idea and whether the numbers make sense. The other important aspect, of course, is security.
Peter mentioned earlier, in his example, that one of the individuals has to provide a personal guarantee for $5,000. If a lender is satisfied with the viability issue and the business case, then the question is about security. Lenders want to tie in someone or something, in terms of a guarantee, even if it's an unincorporated company. With a co-op structure, there are a number of owners. Therein lies the challenge for a traditional lender, who says, “I'm going to have a hundred personal guarantors, because they're all legally owners of this co-op”.
That is a role that perhaps the government can play. In the absence of having each individual personal member provide a guarantee for security purposes, perhaps that's the role the government can play. It can provide a loan guarantee to negate the need for individual members providing personal guarantees for a start-up or for an expansion project.
To your question, we would assess the viability, the business case, and of course, the collateral. But before any decision were made and executed legally, in terms of a document, we would need to know that resolutions to enter into that legal contract with the co-op had been passed appropriately. That would mean a board decision in most cases.