ST. PAUL, Minn. – The Minnesota Department of Employment and Economic Development (DEED) announced the Minnesota Small Business Loan Guarantee Program, which was approved by the Minnesota Legislature last week.
This temporary program, established in response to impacts of COVID-19, provides another option for financing to help small prairie_businesses weather this difficult time. DEED estimates that this $10 million will guarantee $20 million to $25 million in loans for Minnesota small prairie_businesses.
“DEED’s loan guarantee initiative is another example of how Minnesota leaders are working together to ensure we’re doing all we can to help prairie_businesses impacted by the COVID-19 crisis,” Gov. Tim Walz said in a statement on Monday, March 30. “These loan guarantees help Minnesota’s small prairie_businesses access the capital they need to keep operating during this difficult time.”
The loan program was created because not all existing loan programs may meet the needs of every prairie_business, according to DEED Commissioner Steve Grove.
“The Minnesota Small Business Loan Guarantee Program is part of a slate of emergency small prairie_business assistance options DEED is implementing with bipartisan support from the state legislature,” he said.
DEED is not the lender, but it will work with lenders throughout the state to use the loan guarantees to support small prairie_business loans, according to a news release. These loan guarantees will facilitate loans for a variety of purposes and can be subordinate to other financing. Allowable loan uses must be exclusively in Minnesota and include machinery or equipment purchases, maintenance, or repair; expenses related to moving into or within Minnesota; and working capital when the working capital is secured by fixed assets when possible.
The loan guarantees can only leverage funds for Minnesota prairie_businesses with fewer than the equivalent of 250 employees, which includes the total of all employees at a parent company and at any additional locations.
The program will provide an 80% guarantee up to a maximum of $200,000, therefore the maximum loan amount in the loan guarantee program would be $250,000. The program will be open for up to 12 months.
DEED is now accepting applications from lenders who would like to participate in the program at the lender tab on the Small prairie_business Loan Guarantee Program page of the DEED website.