DEED announces Small Business Loan Guarantee Program
ST. PAUL, Minn. (KEYC) — The Minnesota Department of Employment and Economic Development (DEED) announced the Minnesota Small Business Loan Guarantee Program on Monday.
The program was approved by the state legislature last week.
“We created this loan guarantee program because we know many small businesses across Minnesota need help and that existing emergency loan programs may not meet the needs of every business,” said DEED Commissioner Steve Grove. “The Minnesota Small Business Loan Guarantee Program is part of a slate of emergency small business assistance options DEED is implementing with bipartisan support from the state legislature.”
The temporary program will provide another option for financing to help small businesses during the COVID-19 pandemic.
DEED estimates that this $10 million will guarantee $20 million to $25 million in loans for Minnesota small 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 businesses impacted by the COVID-19 crisis,” said Gov. Tim Walz. “These loan guarantees help Minnesota’s small businesses access the capital they need to keep operating during this difficult time.”
DEED is not the lender for this program, but it will work with lenders throughout the state to use the loan guarantees to support small business loans.
Eligible lenders include banks or other commercial lenders, public entities, or private nonprofit economic development organizations whose headquarters are located in Minnesota.
Currently, DEED is accepting applications from lenders who would like to participate in this program. Additional information for interested lenders is available by visiting the Small Business Loan Guarantee Program web page.
The loan guarantees will facilitate loans for a variety of purposes and can be subordinate to other financing.
The department says that 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 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, a department spokesperson said.
The program will provide an 80% guarantee up to a maximum of $200,000, meaning that the maximum loan amount in the loan guarantee program would be $250,000.
The loan guarantee program will be open until March 13, 2021.
Any business that is seeking funding should visit the Small Business Loan Guarantee Program web page to obtain the contact information for enrolled lenders as they become available. Each lender will then utilize their own established application and underwriting processes for the loans.
Visit the Minnesota Department of Employment and Economic Development’s website for additional information and services that are being offered relating to COVID-19.
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