Aitkin County Growth, Inc., First County Fund
PROGRAM
DESCRIPTION/PURPOSE:
The purpose of this fund is to provide a financing
mechanism to qualified business applicants located within
the Aitkin County area to enable them to expand the
primary economic base and employment opportunities of the
Aitkin County area. Loans may be subordinated to the
interests of private sector lenders with respect to
collateral in order to encourage their involvement.
LOAN AMOUNTS:
Maximum participation in any one loan request is $50,000.
ELIGIBLE APPLICANTS:
For-profit businesses engaged in manufacturing or
assembling, processing operations, tourism, and any other
business operation which tends to lead the county
economy.
OTHER FUNDING REQUIRED:
A maximum of 50 percent of the total financing requested
must be secured from other sources. Financial
institutions are encouraged to take as much of the loan
risk as possible, thereby allowing the Revolving Loan
Fund to maximize its impact.
OTHER SPECIAL
REQUIREMENTS:
Applicants should not be eligible for conventional
financing from an established lender without assistance
from the Revolving Loan Fund.
ALLOWABLE USE OF
PROCEEDS:
Acquisition or improvement of fixed assets, including
land, building, fixtures, equipment, and/or machinery, as
well as for working capital purposes.
TERM OF LOAN:
Terms of repayment are flexible and dependant in large
measure on the applicants particular situation. However,
term is normally 5 years or less in order to encourage
the fund to revolve.
INTEREST RATE:
Negotiated, normally below market rate.
APPLICATION PROCESS:
All inquiries pertaining to the Aitkin County Growth
Revolving Loan Fund should be directed to the following:
Aitkin County Growth, Inc.
105 4th Street NW
Aitkin, Minnesota 56431
(218) 927-2172
Arrowhead Community Economic Assistance Corporation (ACEAC)
PROGRAM
DESCRIPTION/PURPOSE:
Arrowhead Community Economic Assistance Corporation
(ACEAC) is a community-based non-profit providing primary
service to Cook County, Lake County, and St. Louis
County, excluding the City of Duluth. It provides service
to Aitkin, Carlton, Itasca, and Koochiching counties in
cooperation with individual communities, other agencies
and organization. Services include community development
and business planning, technical assistance, business
loans, and other types of financial assistance that will
benefit low- and moderate income persons. This includes
providing technical assistance coupled with small
business loans, a microbusiness loan and TA project, and
a peer group lending project.
LOAN AMOUNTS:
Preferred range is $10,000 to $50,000 for smaller
business loans. Microloans are typically $5,000 to
$25,000. Peer Group loans can be as small as $100.
ELIGIBLE APPLICANTS:
For-profit businesses, communities, non-profit
organizations.
OTHER FUNDING REQUIRED:
ACEAC is limited to financing no more than 50% of the
total project cost. The remaining 50% or more must be
financed through resources that may include bank
participation, owner equity, city loan funds, seller
financing, or other sources.
OTHER SPECIAL
REQUIREMENTS:
Applicants must complete a pre-application procedure in
order to determine if the ACEAC will further consider a
request for technical or financial assistance.
ALLOWABLE USE OF
PROCEEDS:
Direct loans are preferred. Loan guarantees, and
purchase/resale contracts and equity investment is also
done on a limited basis. ACEAC will finance fixed assets,
equipment, and working capital needs. Start-up
businesses, business expansions, and home-based ventures
are eligible. Ineligible activities include refinancing,
unless essential to job retention, and in conjunction
with significant economic benefits; relending activities,
most housing activities, with certain exceptions; and
most seasonal businesses and organizations, unless the
assistance will result in year around operations.
TERM OF LOAN:
Varies by project and use of funds. Typically, three
years for working capital, five years for equipment, and
ten years for land and building.
INTEREST RATE:
Below market rates, with a current minimum of 8%
APPLICATION PROCESS:
All inquiries pertaining to the Arrowhead Community
Economic Assistance Corporation should be directed to the
following:
Arrowhead Community Economic Assistance Corporation
702 Third Avenue South
Virginia, Minnesota 55792
(218) 749-2912 ext. 245
1-800-662-5711 ext. 245
fax (218) 749-2913 ext. 287
Arrowhead Regional Development
Commission (ARDC)
Revolving Loan Fund Program
PROGRAM
DESCRIPTION/PURPOSE:
Arrowhead Regional Development Commission (ARDC), in
cooperation with the US Economic Development
Administration (EDA) has developed a business loan
program which will provide below market rate financing
for eligible businesses.
The primary objective of the program is the stimulation
of private investment in order to create and maintain
productive, permanent employment through the
establishment of new businesses or the expansion of
existing businesses. Loans may be subordinated to the
interests of private sector lenders with respect to
collateral in order to encourage their involvement.
LOAN AMOUNTS:
The minimum loan is $10,000 and the maximum loan is
$100,000.
ELIGIBLE APPLICANTS :
For-profit owner operated businesses engaged in
manufacturing, value added products, tourism, the office
sector and technological innovative industries.
OTHER FUNDING REQUIRED:
Applicants must demonstrate that they will leverage a
minimum ratio of two private sector dollars to one
ARDC/RLF dollar (2 to 1).
OTHER SPECIAL
REQUIREMENTS:
Applicants must demonstrate that they will create or
retain a minimum of one job per $10,000 in ARDC/RLF
assistance.
ALLOWABLE USE OF
PROCEEDS:
Land and building acquisition; land improvements;
building construction and renovation; purchase of
machinery and equipment; working capital and inventory
purchase. Financing may not generally be used for
refinancing of existing debt or the purchase of an
existing business unless associated with an expansion.
TERM OF LOAN:
Maturity may not exceed 5 years for working capital, 10
years for machinery and equipment, and 20 years for real
estate.
INTEREST RATE:
Interest rates will be based on prime rate as published
in the Wall Street Journal minus 4 percentage points,
rounded up to the nearest 1/4 percentage point. Minimum
interest rate of 6 percent.
APPLICATION PROCESS:
All inquiries pertaining to the ARDC Revolving Loan Fund
Program should be directed to the following:
The Northspan Group, Inc.
330 Canal Park Drive
Duluth, Minnesota 55802
(218) 722-5545
Fax (218) 722-2335
1-800-232-0707
Carlton County
Revolving Loan Fund
PROGRAM
DESCRIPTION/PURPOSE:
This program provides loans to assist those businesses
and industries which have an economic impact on Carlton
County. The program is designed to expand and diversify
the area's economic base by creating new private
investment in the region. Loans may be subordinated by
the interests of private sector lenders with respect to
collateral in order to encourage their involvement.
LOAN AMOUNTS:
No maximums or minimums. However, loans may not exceed 25
percent of the total project cost. The range of loans has
been between $10,000 and $75,000.
ELIGIBLE APPLICANTS:
Resorts/tourism businesses; energy related businesses
that use indigenous fuels; technologically innovative
industries; manufacturing and industrial operations;
forestry/wood products; industries using indigenous
mineral resources; and other businesses whose presence
will create jobs and expand the tax base.
OTHER FUNDING REQUIRED:
Applicants must demonstrate that they will leverage a
minimum ratio of three dollars in other funding for every
one dollar of Carlton County RLF funding.
OTHER SPECIAL
REQUIREMENTS:
Applicants must demonstrate that they will have a
quantifiable impact on the economy of Carlton County.
ALLOWABLE USE OF
PROCEEDS:
Land and building acquisitions; land improvements; new
building construction; building renovation; purchase of
machinery and equipment; working capital; inventory
purchase; and limited refinancing.
TERM OF LOAN:
Fixed assets to 20 years; machinery and equipment to 10
years and working capital to 5 years.
INTEREST RATE:
Interest rate is based on U.S. Treasury Bonds of similar
maturity less 3%, rounded to the nearest ½%. The minimum
interest rate is 5%.
APPLICATION PROCESS:
All inquiries pertaining to the Carlton County Revolving
Loan Fund should be directed to the following:
Cloquet Area Chamber of Commerce
P.O. Box 426
411 Sunnyside Drive
Cloquet, Minnesota 55720
(218) 879-1551
Fax (218) 878-0223
1-800-554-4350
City of Duluth
1200 Fund
PROGRAM
DESCRIPTION/PURPOSE:
To provide incentive loans for business expansions and
relocations which will create jobs in the City of Duluth.
Loans will be made to eligible businesses to create the
inducement necessary to structure financial packages.
LOAN AMOUNTS:
The maximum loan amount is $500,000.
ELIGIBLE APPLICANTS :
This program is directed toward existing businesses which
have been in operation three or more years. New business
start-ups are not normally eligible.
OTHER FUNDING REQUIRED:
Typically a minimum ratio of two private dollars to one
1200 Fund dollar will apply. A bank loan will be required
for an amount at least equal to the 1200 Fund Loan.
Personal guarantees may be required for privately-held
corporations.
OTHER SPECIAL
REQUIREMENTS:
Loans may not exceed $10,000 per job created. These uses
must be located or be willing to locate in the City of
Duluth.
ALLOWABLE USE OF
PROCEEDS:
Low interest financing for up to 1/3 of the total cost of
the project is available to service (non-personal and
non-retail), wholesale, and manufacturing uses.
TERM OF LOAN:
This program provides fixed rate financing for fixed
assets for a term of up to 17 years, machinery and
equipment for a term of up to 7 years, and working
capital for a term of up to 5 years.
INTEREST RATE:
Varies. Normally fixed, loans approved to date have been
between 3% and 8%.
APPLICATION PROCESS:
All inquiries pertaining to the Duluth 1200 Fund should
be directed to the following:
Duluth 1200 Fund, Inc.
Office of Business Development
City Hall, Room 402
Duluth, Minnesota 55802
(218) 723-3556
City of Duluth
Downtown Storefront Renovation
and Loan Program
PROGRAM PURPOSE:
To stimulate building renovation and improve the overall
appearance of the downtown's many historic and
architecturally-interesting buildings. This program
provides the financial tools necessary to allow building
owners and tenants to repair, rehabilitate, and protect
these structures.
ELIGIBLE USES:
Provide low-interest financing for one-half the cost of
storefront renovation, code-required improvements, and
owners' share of skywalk construction. Emphasis is given
to storefront renovation including building cleaning,
signage, use of colors, window replacement, and kneewall
areas.
This program calls for a matching amount of private
improvements in order to maximize the amount of the
low-interest loans for the storefront, code, and skywalk
work. Private matching costs include any expenditures for
the building or business, except building purchase,
inventory, or refinancing of existing debt.
The City provides an architect to consult with
participants and prepare preliminary drawings and cost
estimates for improving the storefronts. There is no
obligation, and this service is free of charge.
STRUCTURE:
The city has made a pool of money available through local
banks to be loaned at 5% annual interest for one half of
the qualifying loan amount. The remaining half of the
loan amount is funded at market rate from the
participating bank. The maximum loan amount is $200,000.
The bank will determine the length of the loan, take all
fiduciary responsibility, and service the loan. This
program is funded by tax increment financing and is
available for properties located in the Downtown
Development District #2.
Application Process:
For more information contact:
Office of Business Development
City Hall, Room 402
Duluth, MN 55802
(218) 723-3556
Cook County Development Loan Program
PROGRAM
DESCRIPTION/PURPOSE:
The Cook County Development Loan Program provides loans
to businesses located or to be located within Cook
County. Loans made or provided by the County are intended
to create and maintain permanent private sector jobs,
expand the tax base and increase economic productivity;
and also to create the inducement necessary to allow a
project to proceed.
Loans may be subordinated to the interests of private
sector lenders with respect to collateral.
LOAN AMOUNTS:
The maximum loan is $100,000 subject to the availability
of funds.
ELIGIBLE APPLICANTS:
For-profit businesses, organized in any manner permitted
by law consistent with program objectives.
OTHER FUNDING REQUIRED:
Maximum participation may not exceed 33 percent of the
project. As such, applicants must leverage a minimum
ratio of two other dollars to every one dollar in Cook
County funding.
OTHER SPECIAL
REQUIREMENTS:
Projects must be consistent with the economic development
objectives of the program.
ALLOWABLE USE OF
PROCEEDS:
Land and building acquisition; land improvements;
building construction and renovation; and purchase of
machinery and equipment.
TERM OF LOAN:
Maturity may not exceed 10 years for machinery and
equipment, and 20 years for real estate.
INTEREST RATE:
Fixed at 1% 10 year T-Bond for real estate and 1.50%
machinery & equipment or variable at 0.5% 10 year
T-Bond (real estate) and 1% machinery & equipment.
APPLICATION PROCESS:
All inquiries pertaining to the Cook County Development
Loan Program should be directed to the following:
Office of the Auditor
Court House
P.O. Box 1150
Grand Marais, Minnesota 55604
(218) 387-2282
fax (218) 387-2610
Duluth Development Loan Pool Program
PROGRAM
DESCRIPTION/PURPOSE:
To assist in attracting companies or aiding
expansion-minded enterprises relocating to or already
located in Duluth. To provide financing, generally in
conjunction with other economic development funding
sources, with the intermediate term goal of job creation
in the Greater Duluth Area. Program funds are not
intended to "pay-off" or replace traditional
bank debt or to fund operating losses.
ELIGIBLE APPLICANTS:
It is anticipated the businesses qualifying for financing
will meet most of the following criteria:
1. Traditional bank financing is not available.
2. The applicant must be working with at least one area
economic development funding source.
3. Borrower's principals and guarantors will have a
satisfactory credit history.
4. Because of the inherent risks involved, the following
businesses will generally not be eligible for financing:
-Businesses with high risk of environmental
contamination.
-Businesses located on property where prior contamination
exists.
-Businesses involved directly or indirectly in the gaming
industry.
-Businesses where revenues are derived from speculative
activities.
TERM OF LOAN:
Secured annually renewable lines of credit and/or secured
term loans with maturities of 48 months or less.
LOAN AMOUNT:
Total loans to one entity will not exceed $750,000.
INTEREST RATE:
The rate charged will equal prime rate plus 3 percentage
points.
OTHER SPECIAL
REQUIREMENTS:
Accounts receivable, inventory and/or equipment must be
used as security. Real estate may also be involved if
there is an overall shortfall in collateral coverage.
Guarantees are required from all principals owning or
controlling more than 20% of the borrower. The financial
guidelines are as follows: Current and/or projected
cashflow coverage of 1.15x on term loans; Full
subordination of loans outside of the development loan
program may be used to enhance cash flow coverage;
Leverage may be high at the outset but should demonstrate
improvement over time from retained earnings and debt
reduction. Loan agreement and covenants to be based on
financial projections covering the term of the loan.
APPLICATION PROCESS:
For more information contact:
UMD Center for Economic Development
150 School of Business and Economics
10 University Drive
Duluth, MN 55812
(218) 726-8258
fax (218) 726-6338
internet: ced@d.umn.edu
East Range Joint Powers Board
(ERJPB)
Development Loan Program
PROGRAM
DESCRIPTION/PURPOSE :
The purpose of the East Range Joint Powers Board (ERJPB)
Development Loan Program is to promote local economic
development by providing loans to businesses located or
to be located within the East Range area.
Loans made or provided by the ERJPB are intended to
create and maintain permanent private sector jobs, expand
the tax base and increase economic productivity, and to
create the inducement necessary to allow a project to
proceed.
LOAN AMOUNTS:
The maximum loan is $25,000.
ELIGIBLE APPLICANTS:
Resorts/tourism projects which attract tourism
expenditures from outside the region; energy related
businesses which utilize indigenous fuels;
technologically innovative industries;
manufacturing/-industrial operations; industrial
service/-supply; forestry/wood projects; industries based
on utilization of the area's indigenous mineral
resources; agriculture; and other businesses to the
extent they are in compliance with the goals of the
program.
OTHER FUNDING REQUIRED:
The ERJPB is limited to financing no more than 50% of the
total project cost. The remaining 50% or more must be
financed through other resources.
OTHER SPECIAL
REQUIREMENTS:
Any business to be assisted by the program shall be
located within Aurora, Hoyt Lakes or the Town of White.
Benefits will be realized by the citizens in the form of
jobs and tax base.
ALLOWABLE USE OF
PROCEEDS:
Land and building acquisition; land improvements;
building construction and renovation; purchase of
machinery and equipment; working capital and inventory
purchase.
TERM OF LOAN:
Maturity may not exceed 5 years for working capital, 10
years for machinery and equipment and 20 years for real
estate.
INTEREST RATE:
Fixed at 6.5%.
APPLICATION PROCESS:
For more information contact:
Economic Development Coordinator
East Range Joint Powers Board
City Hall
Aurora, Minnesota 55705
(218) 229-3671
Fax (218) 229-3561
Iron Range Resources And
Rehabilitation Board (IRRRB)
Bank Participation Loan Program
PROGRAM
DESCRIPTION/PURPOSE:
Business loan program with the expressed purpose "to
create and maintain productive, permanent skilled
employment" through the establishment of new
businesses or the expansion of existing businesses in the
private sector. This program is limited to businesses
which reside or will reside within the Taconite Tax
Relief Area.
LOAN AMOUNTS:
The maximum participation is $250,000 in any single
project.
ELIGIBLE APPLICANTS:
For-profit businesses engaged in manufacturing/assembly,
tourism businesses which attract tourism expenditures
from outside the region, and businesses which produce
technologically innovative products.
OTHER FUNDING REQUIRED:
Bank financing is required in participation with IRRRB in
an amount not less than the proposed IRRRB loan.
OTHER SPECIAL
REQUIREMENTS:
An applicant must have an adequate capital investment
(equity contribution) in their own business. IRRRB
considers all credit factors in analysis for making
prudent lending decisions.
ALLOWABLE USE OF
PROCEEDS:
Land and building acquisition; land improvements;
building construction and renovation; purchase of
machinery and equipment; working capital and inventory
purchase. The IRRRB is not a construction lender, but
will consider take-out financing upon completion of the
project. Primary financing: fixed assets.
TERM OF LOAN:
Negotiated with borrower and bank, but normally matched
to the life of the assets being financed.
INTEREST RATE:
The rate of interest shall be no less than the lessor of
8 percent or an interest rate 3 percentage points less
that a full faith and credit obligation of the United
States government of similar maturity.
APPLICATION PROCESS:
All inquiries pertaining to the IRRRB Bank Participation
Loan Program should be directed to the following:
Iron Range Resources and Rehabilitation Board
Attn: Economic Development Division
P. O. Box 441, Highway 53 South
Eveleth, MN 55734
(218) 749-7721
1-800-765-5043
fax (218) 749-9665
Iron Range Resources and
Rehabilitation Board (IRRRB)
Community
Development Grants
PROGRAM
DESCRIPTION/PURPOSE:
Community development grants are awarded to eligible
local units of government to help them address their most
critical community/economic development needs.
Infrastructure grants may be provided to a municipality
for a businesses needs with the intent of providing
employment opportunities.
GRANT AMOUNT:
Grant awards for any single project will not exceed
$500,000 in any single funding cycle.
ELIGIBLE APPLICANTS:
Cities, townships, counties, Indian tribal governments,
and nonprofit organizations.
OTHER FUNDING REQUIRED:
Community development staff will assist communities in
locating other sources of financing to bring the IRRRB's
share of the project under 50%.
BASIC CRITERIA:
The project must demonstrate direct or indirect retention
or creation of employment opportunities; the degree of
need of urgency of the project must be proven; the impact
of the project on the region and the area most directly
served by the applicant must be met; and the project must
meet the financial, economic, and technological
feasibility of the project.
INELIGIBLE USE OF
PROCEEDS:
Landfills, electrical power distribution systems,
feasibility studies, grantswriting costs, administrative
costs, engineering studies, city or county owned medical
facilities, housing, social programs, and
engineering/architectural fees in excess of 10% of the
project cost.
OTHER SPECIAL
REQUIREMENTS:
Grantee must comply with prevailing wage requirements
which involves the submission of a form to the Dept. of
Labor and Industry and also a payroll report form to be
submitted to the IRRRB with each request for
reimbursement; and IRRRB sign must be erected at each
project site prior to commencement of construction;
projects must be constructed in compliance with the MN
Uniform Code; grantee must comply with all federal,
state, and local laws, ordinances and regulations
pertaining to bidding and construction; grantee must
provide copy of bid tabulations; and a final accounting
report must be submitted upon completion of any IRRRB
funded project.
APPLICATION PROCESS:
Project profiles (pre-applications) must be submitted
from January 1 through April 15 of each calendar year.
Formal project applications must be submitted (following
IRRRB approval of a corresponding project profile) by
June 30 of each calendar year.
For more information, contact:
Iron Range Resources and Rehabilitation Board
Attn: Community Development Division
P.O. Box 441, Highway 53 South
Eveleth, MN 55734
(218) 749-7721
(800) 765-5043
fax (218) 749-9665
Iron Range Resources and
Rehabilitation Board (IRRRB)
Direct Lending
Program for Resort Septic Systems
PROGRAM DESCRIPTION/PURPOSE:
IRRRB has established a loan program targeted toward
eligible resort properties located within Taconite Tax
Relief Area. The primary purpose of the program is to
assist area resort owners by providing low cost financing
to help them upgrade and/or replace their septic systems.
LOAN AMOUNTS:
The program will provide financing for up to 50% of
identified costs to a maximum of $15,000.
ELIGIBLE APPLICANTS:
To be eligible for assistance under this program a resort
must be deemed a "licensed resort or lodging
facility" by the county wherein the resort is
located. The licensed resort must also be located on a
lake or waterway within the primary Taconite Tax Relief
Area (TTRA) as defined by school district boundaries
according to Minnesota Statue 273.134.
OTHER FUNDING REQUIRED:
The program will only cover up to 50% of the project
costs. Therefore, its remainder must by contributed by
other sources of financing (bank or other private
source).
OTHER SPECIAL
REQUIREMENTS:
Collateral coverage will consist of the assets of the
resort and the personal guaranty of the principle(s).
ALLOWABLE USE OF
PROCEEDS:
Design and engineering, excavation, installation and
material cost related to the upgrade and/or replacement
of an existing septic system or other eligible projects.
TERM OF LOAN:
Fixed term up to five (5) years.
INTEREST RATE:
The program's interest rate will be equal to the rate
identified by First Bank Minnesota, N.A. as their prime
rate.
APPLICATION PROCESS :
Applications can be submitted and will be reviewed on an
ongoing basis or until the program's funding is depleted.
Each application will be reviewed by IRRRB's staff and an
Advisory Committee in accordance to the following
criteria:
-Demonstrated repayment ability
-Equity commitment
-Adequate collateral coverage
-Management capability
-Evidence of prevailing wage compliance on the project
construction, if applicable.
For more information, contact:
Iron Range Resources and Rehabilitation Board
Attn: Community Development Division
P.O. Box 441, Highway 53 South
Eveleth, MN 55734
(218) 749-7721
(800) 765-5043
fax (218) 749-9665
Iron Range Resource and
Rehabilitation Board (IRRRB)
Industrial Revenue Bond Program
DESCRIPTION/PURPOSE:
The commissioner has the ability to issue industrial
revenue bonds to provide financing for specific projects.
Revenue bonds can provide long term fixed rate financing
for industrial manufacturing projects.
LOAN AMOUNTS:
Tax Exempt Issues - Under $10 Million Dollars
Taxable Issues - No Cap
ELIGIBLE APPLICANTS:
Start-ups or expansions in the industrial or
manufacturing field.
OTHER FUNDING REQUIRED:
Sufficient equity.
OTHER SPECIAL
REQUIREMENTS:
All credit factors will be evaluated.
ALLOWABLE USE OF
PROCEEDS:
Land and building acquisition, building construction,
purchase of machinery and equipment.
TERM OF LOAN:
Negotiated with agency and underwriting firms.
INTEREST RATE:
Variable
APPLICATION PROCESS:
All inquiries pertaining to the IRRRB Industrial Revenue
Bond Program should be directed to:
Iron Range Resources and Rehabilitation Board
Director, Economic Development
P. O. Box 441, Highway 53 South
Eveleth, MN 55734
(218) 749-7721
1-800-765-5043
fax (218) 749-9665
Itasca Growth Fund
Koochco, Inc.
Loan Program
Minnesota Power
Loan Program
Northeast Entrepreneur Fund, Inc.
Northeast Ventures Corporation
Northland Foundation
Business Loan
Program
Northland Foundation
Loan Guarantee Program
Northland Foundation
Arrowhead Technology Fund
Northstar Community Development
Corporation
Revolving Loan Fund
Two Harbors Development Commission
Financing Program
United Power Association (UPA)
Business Financing Program
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URL: http://www.d.umn.edu/~jjacobs1/fr1.html Comments to: jjacobs1@d.umn.edu Created June 1995, Last revised June 1995