The Big Carrot is a democratically structured and workerowned organic foods retailer. Since its founding in $1983$ as a small store in Toronto$$s east end that employed nine, it has expanded to a supermarket with a staff of $187$ of which $65$ are members, and with annual sales in the fiscal year $20072008$ of $$27$ million. The Big Carrot is also one$-$third owner of Carrot Common, a small mall in which it is housed. As the business has grown, The Big Carrot has expanded and taken over other stores in the mall creating an organic fresh meat store, a body care shop, a supplement department called The Wholistic Dispensary, and an Organic Juice Bar, and now is expanding the supermarket itself. Of the profits that The Big Carrot receives from Carrot Common, one third goes to an organization called Carrot Cache, which provides loans and grants to organizations related to organic agriculture and other co$-$operative businesses, both in Canada and internationally. Background Six of the founders of The Big Carrot were employees of another organic$-$foods retailer in Toronto, a sole proprietorship which the employees believed would be sold to them. The owner did sell $46$ percent of the shares and also permitted the employees to manage the operation. It was during this period that the core group of The Big Carrot$$s founders received their first taste of workplace democracy. The store prospered, sales doubled, and business experience was acquired. However, the majority owner decided to return to the business as $$boss$,$ and the six employees who were managing the store in his absence determined that their energies could be better used to establish their own enterprise. Well prepared to operate their own store, they nevertheless lacked previous experience in starting a business, particularly one with worker ownership, a matter that required much research on their part. Financing was a challenge, and is acknowledged as one for worker$-$owned businesses in general. There should be no mystery as to why this is so: Business financing requires assets and credibility and, in the eyes of the financial community, ordinary working people and the unemployed do not achieve high ratings on either of these. To the members of The Big Carrot without jobs or substantial savings, the $$125,000$ required for the original market seemed overwhelming. Personal loans totaling $$25,000($$$5,000$ for five members$)$ were secured from a small credit union. To secure an additional $$20,000,$ four more people were accepted as members. With $$45,000$ in hand, $$25,000$ was borrowed from friends and relatives. The most difficult step was a $$50,000$ bank loan to purchase equipment. The bank manager hesitated, requesting a market survey, collateral, and the name of the persons or entity $$in charge.$$ Five members of the co$-$operative were made individually liable, and three members had to use their homes as security. In all, it took nine discouraging months to arrange the financial package. At times, it seemed doubtful that the business would ever become operational. The financial package placed a lot of pressure on The Big Carrot to achieve sales that would permit it to break even. Interest charges were very high and the arrangements were cumbersome. In order to establish a substantial member investment in the enterprise, The Big Carrot had to take on more members than seemed prudent, given the projected sales at start$-$up$.$ And instead of the co$-$operative being collectively responsible for the bank loan, as is usual for a business loan, members were treated individually. However, the business took off and by the first year$-$end, sales passed $$1$ million, and by the second year$-$end, annual sales were $$2$ million. The financing required for expansion in $1987$ to the supermarket and mall was far greater than for the initial store, but the co$-$operative had acquired credibility. Its customers purchased $$265,000$ of nonvoting preferred shares at $10$ percent interest. Good fortune was also needed$$in this case, a benevolent real estate developer, David Walsh, and the availability of a parking lot across the street with the necessary space for an $8,000-$squarefoot$-$ supermarket and a $14-$store mall $($Carrot Common$).$ In total, the deal came to $$6\mathrm{.}5$ million, with Walsh arranging the financing. The Big Carrot financed $$700,000,$ which covered the costs of constructing and equipping the supermarket, in addition to making a token investment in the mall. Despite support from its customers and the deal with Walsh, the financial community was resistant. Before a loan was arranged, The Big Carrot was turned down by three banks, two trust companies, and the Credit Union Central of Ontario. Finally, the Federal Business Development Bank $($often a small$-$business lender of last resort$)$ agreed to a five$-$year $$250,000$ loan. Unlike the bank loan for the first store, board members who signed limited their liability. The remaining financing was from store revenues $($$$70,000)$ and supplier credits $($$$115,000).$ Short$-$term re