REGIONAL FINANCING SUPPORT

Upper Minnesota Valley Development Commission
In 1973 the Upper Minnesota Valley Regional Development Commission (UMVRDC), was organized by local elected officials as authorized by the Regional Development Act of 1969. The UMVRDC serves counties of: Big Stone, Chippewa, Lac qui Parle, Swift, and Yellow Medicine; which make up Region 6W. Its purpose according to the legislation is:”facilitate inter-governmental cooperation and to ensure the harmonious coordination of state, federal, and local comprehensive planning and development programs for the solution of economic, social, physical, and governmental problems of the state and its citizens.”

Western Minnesota Revolving Loan Fund

Southwest Initiative Foundation
The Southwest Initiative Foundation (SWIF) is a regional organization funded by the McKnight Foundation for the purpose of promoting community and economic development over the 18 county area of southwestern Minnesota.

SWIF Small Communities Loan Program
SWIF Business Finance and Micro-Enterprise Program
SWIF Renewal Energy Loan Program
SWIF Revolving Loan Fund

Swift County Financing
State & Federal Financing

The WesMN RLF, a nonprofit 501 (c)(3) corporation, was established in 1988 as a gap financing lender for new or expanding businesses in Region 6W. The loan fund was capitalized by grants from the U.S. Department of Commerce Economic Development Administration (EDA) and matching dollars by the five counties that make up Region 6W. The fund is re-capitalized with principal and interest payments from loans made to borrowers.

Eligibility

• Eligible Lending Area: Big Stone, Chippewa, Lac qui Parle, Swift & Yellow Medicine Counties
• Activities Financed: Business start-ups or expansions with priority given to manufacturing, technology and/or diversification of the local economy
• Eligible Businesses:
  • Manufacturing
  • Commercial/Service & Retail
  • Non-profits & Quasi-public

Requirements

• Equity: 10% borrower equity is encouraged
• Collateral: All loans must be secured with available assets, inventory, real estate and personal guarantees
• Job Creation Goal: 1 job created or retained / $10,000 in WesMN RLF loan proceeds
• Other Requirements:
  • Demonstrate Financing Gap
  • Bank Participation Required

Rates / Terms

• Type of Assets Financed: Fixed assets, Working capital & Real estate
• Loan Size: $5,000 – $100,000.00
• Financing Terms:
  • Fixed assets financed up to 10 years
  • Working capital financed up to 5 years
  • Real estate financed up to 20 years
  • Scheduled balloon payments are sometimes utilized
• Interest Rates: Fixed rate. Not less than 4% below prime with a minimum of 4%. Most loans are made at 5 – 7%

Swift County RDA
320-842-4769
email

-or-

Jacki Anderson
Western Minnesota
Revolving Loan Fund
323 West Schlieman Avenue
Appleton, MN 56208
320-289-1981
jacki.anderson@umvrdc.org

The Micro-Enterprise Program of SWIF was created to help entrepreneurs develop small business and self-employment opportunities through micro-loans and technical assistance. Loans of $500 to $35,000 are available for start-up or existing for-profit small businesses that do not have reasonable access to other sources of funding. SWIF staff will work with entrepreneurs to develop a business plan and will provide on-going assistance & training. Women and minorities are especially encouraged to apply.

Eligibility

• May be either start-up or expansion project and must be located within the 18 counties served by SWIF.
• Business type include, but are not limited to, those engaged in:
  • Manufacturing
  • Service
  • Retail (some limitations)
  • Daycare businesses (may be non-profit)
• Applicants must have:
  • Credit history that demonstrates a reasonable assurance of loan repayment
  • Good character and strong commitment to their business idea.
  • Business management skills and / or be willing to participate in training designed to strengthen their business skills.
  • A realistic business plan that demonstrates the feasibility of the business idea.
• Project must not be in direct competition with an existing area business, or must prove there is room in the market

Requirements

• Funds can be used for start-up costs, equipment, inventory, furniture & fixtures and working capital.
• Funds cannot be used for debt refinancing, real estate purchases or building renovations.
• Loans must be secured with collateral.
• Borrower will be responsible for all loan processing & filing fees.
• Borrower should provide equity for the project, and may be required to sign a personal guarantee and have life insurance.
• The SWIF must be carried as a loss payee on property insurance.
• Business management training & technical assistance may be required.

Rates / Terms

• Amounts of $500 to $35,000 are available
• Interest rates start at 9%
• Loan term shall be 6 years or less.

Applicants are encouraged to call or visit the SWIF at an early stage in the development of their business to complete a needs assessment. This will help determine the level of assistance needed and the overall feasibility of the project.

The purpose of the Renewable Energy Loan Program is to assist businesses engaged in renewable energy activities, whether directly or indirectly, that help build the renewable energy industry in the 18 counties of southwest Minnesota. One of the key economic assets in southwest Minnesota is renewable energy. Developing this to its fullest potential is critical to the future of southwest Minnesota.

Eligibility
Business ventures eligible for these loan funds may include:

• Energy production
• Secondary businesses that support the renewable energy industry
• Energy usage conversion projects
• New and emerging technologies

Requirements
Loan funds may be used for:

• Up front development costs
• Land, building, or building improvements
• Machinery and equipment
• Inventory
• Working capital

Rates/Terms

• Loan size must not exceed 25 percent of a project up to a maximum of $500,000, with the exception of energy conversion projects, which may qualify for 100 percent financing with bank participation in other aspects of the business.
• Interest rates will typically be at market rate, but will be determined by a measurement of risk and on a case-by-case basis.
• Loan term is based on the life of the asset and will match the term of other lenders on the project.
• Loans must have adequate collateral and may be subordinate only to the interest of the primary lender bank.
• Loan recipients will be charged a one percent loan origination fee plus all legal costs associated with the closing of the loan.

For more information about the Southwest Initiative Foundation’s Renewable Energy Initiative, click here.

SWIF’s Revolving Loan Fund is designed to support small business growth throughout the 18-county southwest Minnesota region. Businesses that create and retain quality employment by generating new wealth and diversifying the regional economy are eligible.

Eligibility
Eligible businesses may be either start-ups or expansion projects. The types of businesses include, but are not limited to, those engaged in:

• Technologically innovative industries
• Value added manufacturing
• Businesses within economic asset sectors for the region, such as renewable energy projects and food production sectors
• Business growth that leads to greater individual and community prosperity
• Businesses whose markets extend beyond the region

Requirements

• Loans may be used for machinery and equipment, inventory, working capital, and in some instances, real estate.
• As a general requirement, the SWIF prefers that one job be created for every $15,000 of its loan proceeds.

Rates/Terms

• Business loans generally range from $25,000 to $200,000.
• Interest rates are fixed at one percent under the Prime Rate at the time of loan approval, with a six percent floor.
• The loan term is based on the life of the asset. Generally, but not always, loan maturities are five years. Loans may have extended amortizations if the financed asset warrants. Amortizations beyond five years will require a balloon payment.
• Loans must have adequate collateral and may be subordinate only to the interest of the primary lender bank.
• Loan recipients will be charged a one percent loan origination fee plus all legal costs associated with the closing of the loan.