I agree with WAB that borrowing money from a SH for a capital project could also present control problems. The SH might want a say in how "her" money is spent. She might want to see contractor bids, have a say in deciding what contractor the project is given to, see and OK invoices for the work before they are paid, etc. Unless she is a BM or is on a committee for the project, there are aspects of this that she shouldn't be involved in. There are many ways the relationship between coop and SH could suffer in this situation, and the project could suffer too.