Business Advice & Financial Assistance
Sherburne County intends to provide assistance to industries both in qualifying for incentive based financing and in coordinating attractive financing packages. The following is an outline of financing programs that could be available to assist industries undertaking an expansion into our area. For more information on any of the programs call 763-765-3001 or 1-800-433-5229 (in Minnesota) to speak to the Economic Development Coordinator.
- Loan Programs
- SBA 7(a) Guaranteed Loan Program
- SBA 504 Loan Program
- USDA Business and Industry Loan Guarantees
- Tax Increment Financing
- Minnesota Investment Fund
- Small Business Development Loan
- Becker Loan Fund
- Big Lake Loan Fund
- Micro Loan Fund
- Princeton Loan Fund
- Local Revolving Loan Funds
- Business Loans
- Seed Investment
- Technology Capital Fund
- Small Business Environmental Improvement Loan Program
- Technical Assistance (Business Advice - Consulting Services)
- Environmental Assistance
- Employment Related Incentives
Loan Programs:
SBA 7(a) Guaranteed Loan Program
Agency:
Small Business Administration
Melvin Aanerud, 612-370-2331
The program operates through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA (up to 85% of loan) -- the Agency has no funds for direct lending or grants. A maximum loan amount of $2 million has been established. However, the maximum guaranty is generally $1 million. Use of proceeds: purchase of real estate, construction, renovation or leasehold improvements, acquisition of furniture, fixtures, machinery and equipment; purchase of inventory and working capital.
| Term | Fees | Interest |
|---|---|---|
| twenty-five (25) years for real estate and equipment; and, generally seven (7) years for working capital. | $0-$150,000 loan: 2% of guaranty.$150,001 -$700,000 3% of guaranty. $700,000-$1,00,000 3.5% of guaranty. $1,000,000 +additional .25 % | $50,000+ loan - max. prime + 2.25% (2.75% if 7+ years). $25-$50,000 - max. prime + 3.25% (3.75% if 7+ years). $0-$25,000 - max. prime +4.25% (4.75 if 7+ years). |
| Interest Type | Amount $ | Eligibility/Requirements |
| fixed/variable | Up to 75% of loan. Max. $2,000,000 | Determined by four factors:
|
Agency:
Minnesota Business Finance Corporation,
Nadene Kruize, 800-593-0123
SBA provides subordinate, second mortgage financing to be combined with bank financing of fixed assets.
| Term | Fees | Interest |
|---|---|---|
| 10 and 20 year terms | Approximately 3% of debenture. | Pegged to an increment above 5 and 10 year US Treasury Issues. |
| Interest Type | Amount $ | Eligibility/Requirements |
| fixed | Up to $4,000,000 | 10% - 20% equity. For profit business. |
USDA Business and Industry Loan Guarantees
Agency:
U.S. Department of Agriculture,
David Gaffaney: 651-602-7814
Since Sherburne is a rural county, its businesses are eligible for loan guarantees from the United States Department of Agriculture (USDA). USDA guarantees loans 80% up to $5,000,000, 70% up to $10,000,000 and 60% over $10 mil.
| Term | Fees | Interest |
|---|---|---|
| 1 to 30 years | Annual renewal fee | Set by primary lender. |
| Interest Type | Amount $ | Eligibility/Requirements |
| fixed/variable | Up to $40 million | 10% to 20% equity depending on if it is a new or existing business. Must be located in rural area - area less than 50,000 in population. |
Tax Increment Financing, Tax Rebate Financing
Agency:
Sherburne County and Cities
Brian Bensen: 763-765-3001
The Minnesota State Legislature has created Tax Increment Financing as a locally controlled source of financing. Tax Increment Financing can be used for the following purposes:
- Land and building acquisition.
- Demolition and clearance.
- Relocation costs.
- Public improvements (sewer, water, utilities).
- Soil corrections.
- Site preparation.
- Legal, engineering and administrative expenses.
- Bonding and capitalized interest.
- Project contingency.
Prohibitive costs of new public improvements can be reduced by dedicating property tax revenues for a specific number of years from a directly related development. Incremental tax revenues generated from a new project are for repayment of project costs falling in the above categories.
| Term | Fees | Interest |
|---|---|---|
| Varies | Varies by jurisdiction. | Rate set by local jurisdiction if financed other than pay as you go. |
| Interest Type | Amount $ | Eligibility/Requirements |
| Determined by local Jurisdiction | Based on project valuation and set by local jurisdiction | Must use traditional lender for majority of financing. Other eligibility criteria set by local jurisdiction. |
Agency:
Department of Employment and Economic Development:
Steve Sussman: 651-297-1164 or Carol Presley-Olson 651- 296-3898
To create new and retain the highest quality jobs possible on a state wide basis with a focus on industrial, manufacturing and technology related industries; to increase the local and state tax base and improve the economic vitality for all Minnesota citizens. Loans for land, buildings, equipment and training are eligible. Funds may also be used for infrastructure improvements necessary to support businesses located or intending to locate in Minnesota.
| Term | Fees | Interest |
|---|---|---|
| Real estate a maximum of 20 years; machinery and equipment a maximum of 10 years. | Negotiated | Negotiated |
| Interest Type | Amount $ | |
| Negotiated | $500,000 |
Eligibility/Requirements:
Cities, counties, townships and recognized Indian tribal governments. Minimum
Requirements. All projects must meet minimum criteria for private investment,
number of jobs created or retained and wage thresholds. Other Funds Required.
At least 50% of total project costs must be privately financed through owner
equity and other lending sources. Most applications selected for funding have
at least 70% private financing.
Small Business Development Loan
Agency:
Department of Employment and Economic Development:
Steve Sussman: 651-297-1164 or Carol Presley-Olson 651-296-3898
The Minnesota Agricultural and Economic Development Board (MAEDB) makes small business loans through the issuance of industrial development bonds backed by a state-funded reserve of 25%. Acquisition of land, building, machinery and equipment; building construction and renovations; development costs such as engineering, legal and financial fees. Working capital and refinancing are not eligible.
| Term | Fees | Interest |
|---|---|---|
| Real estate at maximum of 20 years; equipment at 10 years or 80% of useful life. | Bond issuance costs of 4% are capitalized with the loan principal. Ten percent of bond issue must be escrowed. | Market rate of interest for similar securities at the time bonds are sold |
| Interest Type | Amount $ | |
| Fixed | $500,000 min - $6 Mill. max. |
Eligibility/Requirements:
Generally, 20% of the project costs must be privately financed through
equity or other sources; 25% is required on equipment transactions.
Manufacturing and industrial businesses located or intending to locate
in Minnesota, as defined by Small Business Administration size and
eligibility standards; generally, those with 500 employees or fewer.
New capital investment resulting in a significant number of new jobs
and other beneficial economic impacts.
Becker Loan Fund
Agency:
City of Becker
Nick Ziegelmann: 763-261-4302
Industrial, gap financing for fixed assets and operating capital.
| Term | Fees | Interest |
|---|---|---|
| 7 years max | Legal fees and interest at prime | Set at Prime |
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed | Up to $100,000 | Within city limits, business subsidy law requirements, in conjunction with a primary lender. |
Big Lake Loan Fund
Agency:
City of Big Lake
Jim Thares: 763-263-2107
Fixed Assets, Real Estate
| Term | Fees | Interest |
|---|---|---|
| 7-15 years | 1% loan origination fee. Legal and other loan closing costs. | Prime or similar. |
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed | $40,000 | Subsidy law requirements. Must be in conjunction with a primary lender. |
Agency:
City of Elk River
Cathy Mehelich: 763-635-1000
Below prime loans for industrial businesses for real estate, equipment, and infrastructure costs.
| Term | Fees | Interest |
|---|---|---|
| 10-15 yrs | 10% of loan amount | 2-3 points below prime |
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed | $100,000 | Located in West Elk River and must be an industrial business. 10% equity requirement. |
Princeton Loan Fund
Agency:
City of Princeton
Jay Blake: 763-389-2040
Commercial and Industrial companies for fixed assets including land and building purchase, building construction, leasehold improvements and renovations; acquisition, renovation, or moving machinery and equipment.
| Term | Fees | Interest |
|---|---|---|
| 5-8 years | Reimbursement of closing and administrative costs | At or below market |
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed | Up to $75,000 | Be within city limits, business subsidy law requirements, job retention and/or creation and increased tax base. |
Local Revolving Loan Funds
Agency:
Sherburne County: Brian Bensen - 763-765-3001
Elk River: Cathy Mehelich - 763-635-1000
Big Lake: Jim Thares - 763-263-2107
Fixed assets including land and building purchase, building construction, leasehold improvements and renovations; acquisition, renovation, or moving machinery and equipment; and working capital loans secured with fixed repayment schedules.
| Term | Fees | Interest |
|---|---|---|
| Real Estate - up to 20 years; machinery, equipment up to 10 years. | 1.75% loan origination fee, 0.5% loan underwriting fee, all other legal and other loan closing costs. | Rates determined by local jurisdiction. |
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed, Adjustable | Up to $750,000 | A financial institution must be a participant in the project financing. Other criteria set by local jurisdictions. |
Business Loans
Agency:
Initiative Foundation
Paul Kleinwachter: 320-631-2009
The Initiative Foundation Business Loan Program is designed to assist business owners and conventional funding sources in financing new and expanding businesses that provide quality job opportunities and strengthen the local and regional economy. Eligible projects: land and buildings, construction, remodeling, machinery and equipment, financing costs and working capital.
| Term | Fees | Interest |
|---|---|---|
| Varies | 1% loan application/origination fee | Determined on a case by case basis |
| Interest Type | Amount $ | |
| Fixed | Up to $250,000 |
Eligibility/Requirements:
Owner must get 50% cost from conventional lenders and reside in the county.
Small to medium-sized industrial, commercial, and technology-based businesses
located or majority of owners reside in the Foundation's 14-county service
area. Preference is given to: value-added natural resource/agricultural-based
products processing; manufacturing; high technology industries.
Seed Investment
Agency:
Initiative Foundation
Paul Kleinwachter: 320-631-2009
The purpose of the Seed Fund is to promote the entrepreneurial culture within Central Minnesota and promote the capacity of manufacturing or technology-related companies to grow. Eligible uses of funds include the development of new products or technologies including:
- Product research and development.
- Working capital to develop new product(s).
- Market research and development of new product(s).
- Prototype development and testing.
- Other related uses deemed appropriate by the Central Minnesota Seed Fund.
| Term | Fees | Interest |
|---|---|---|
| n/a | 1% origination fee | n/a |
| Interest Type | Amount $ | |
| n/a | maximum is $50,000 |
Eligibility/Requirements:
Project funding requires a minimum of a 1:1 equity or cash match dollar for
every dollar of Seed Fund investments. Eligible participants include individuals,
small and medium size businesses located in the 14 counties served by the
Initiative Foundation and the St. Cloud Regional Office of Minnesota
Technology.
Technology Capital Fund
Agency:
Initiative Foundation
Supports emerging technology ventures and helps established companies integrate proven productivity applications into their business operations and process. Eligible investments: Operating capital, Fixed Assets, land and buildings, Construction and leasehold improvements, Machinery and equipment for high-volume productivity or high margin applications, Commercialization of new product launch and marketing, Productivity and process-enhancing software systems.
| Term | Fees | Interest |
|---|---|---|
| Varies | Up to 2% origination fee, legal fees associated with documenting and closing the investment. | Varies |
| Interest Type | Amount $ | |
| Varies | $500,000 |
Eligibility/Requirements:
Demonstrated management skills, industry experience and financial controls. A
sound business plan with financial projections. Due diligence in product and
technology validations. Outside assessment of business and marketing plan (if
deemed necessary). Creation of living wage jobs with broad employee benefits.
Small Business Environmental Improvement Loan Program
Agency:
Minnesota Pollution Control Agency
Mike Nelson: 651-757-2121 or 800-985-4247 (within MN)
Loans for environmental improvement projects such as site clean-ups or equipment purchases exceeding environmental regulations.
| Term | Fees | Interest |
|---|---|---|
| 7 years | n/a | 4% or half prime rate, whichever is greater. |
| Interest Type | Amount $ | Eligibility/Requirements |
| Fixed | $50,000 | Must have less than 50 employee, net worth less than $1,000,000, and an after-tax profit of less than $1,000,000. |
Technical Assistance:
Sherburne County Small Business Development Center
Consulting services for area businesses are available at no cost two days a month at the Government Center in Elk River. Jack Gabler, assists startup and existing businesses with cash flow projections, loan applications, business plans, and a variety of business questions. Appointments are scheduled at 320-308-4842.
Environmental Assistance:
Minnesota Small Business Environmental Assistance Program
The Small Business Environmental Assistance Program (SBEAP) helps Minnesota businesses and local governments maintain compliance with new and existing environmental requirements, reduce or eliminate the amounts of emissions and wastes generated, and reduce regulatory burden. These services are free, non-regulatory, and impose no obligations. More information can be found at Minnesota Pollution Control Agency website or by calling (651) 282-6143.
If you have any questions, please contact Mike Nelson or Troy Johnson, SBEAP Coordinator
Employment Related Incentives:
The following is a description of employment training programs which may be of value to your company:
Job Training Partnership Act Programs (JTPA)
JTPA programs offer financial incentives to employers for hiring and training low-income and unemployed people. The programs are federally funded and locally planned and operated.
Funds are available to pay for specialized classroom training of the employer's choice or to reimburse an employer up to 50 percent of wages paid for a specified period, up to six months, of on-the-job training.
Besides customized classroom and on-the-job training, the Job Training Partnership Act offers a variety of other services, including vocational evaluation and assessment.
Targeted Jobs Tax Credit provides an incentive to employers to hire persons from targeted groups that have a particularly high unemployment rate or other special employment needs. There is no limit on the number of eligible people who may be hired or on the number of times an employer may claim the tax credit.
Employers receive a federal tax credit of as much $2,400 for each new adult hire; $1,200 for each new summer youth hire; and $9,000 for each new long-term family assistance recipient hired over a two-year period.
Minnesota Job Skills Partnership
Agency:
Department of Employment and Economic Development
Steve Sussman: 651-297-1164
Provides State grants to educational institutions for the development of training programs that meet specific business needs. To act as a catalyst between business and education in developing cooperative training projects that provide training for new jobs or retrain existing employees. Grants are awarded to educational institutions with businesses as partners. Funds may be used for educational infrastructure improvements necessary to support businesses located or intending to locate in Minnesota.
| Term | Fees | Interest |
|---|---|---|
| 1-3 years | n/a | n/a |
| Interest Type | Amount $ | Eligibility/Requirements |
| n/a | Up to $400,000 | All projects must have at least one educational institution and one business working together. Costs are paid on a reimbursement basis. |
Sherburne County Govt Center
ATTN: Economic Development
13880 Business Center Dr NW
Elk River, MN 55330-1692
Office Location & Hours
| Phone: | 763-765-3001 800-433-5229 |
| Fax: | 763-765-3232 |
admin@co.sherburne.mn.us