Small Business Development Loan Program
About Small Business Development Loans
The Minnesota Agricultural and Economic Development Board (MAEDB) administers this loan program in order to promote the creation of jobs and assist business expansions in the state. The MAEDB issues industrial development bonds backed by a state-funded reserve of 25% and uses the proceeds to provide loans to businesses.
- Manufacturing and industrial businesses located or intending to locate in the state are eligible.
- The company must meet the Small Business Administration definition of a small business to be eligible under this program – generally firms with less then 500 employees meet this criterion
- Project must create a “significant” number of new jobs.
- Funds can be used for land, buildings, machinery & equipment and project administration costs.
- Working capital and debt refinancing are not eligible.
- At least 20% of project costs must be privately financed through equity (25% is required for equipment)
- First position on real estate or equipment is required along with personal guarantees of the owners. Other security may be required.
- Bond issuance costs of 4% are capitalized with the loan principle.
- 10% of the bond issue must be escrowed.
- Amounts from $500,000 to $6 million are available.
- Rates are fixed and are determined by the market rate for similar securities at the time the bonds are sold.
- Term is up to 20 years for real estate and 10 years for equipment, not to exceed 80% of its useful life.
Swift County RDA
Category: State and Federal Financing
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