Business & 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

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.

TermFeesInterest
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 TypeAmount $Eligibility/Requirements
fixed/variable Up to 75% of loan. Max. $2,000,000 Determined by four factors:
  • Type of Business
  • Size of business
  • Use of Loan Proceeds
  • Special Circumstances

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SBA 504 Loan Program

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.

TermFeesInterest
10 and 20 year terms Approximately 3% of debenture. Pegged to an increment above 5 and 10 year US Treasury Issues.
Interest TypeAmount $Eligibility/Requirements
fixed Up to $4,000,000 10% equity. For profit business.

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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.

TermFeesInterest
1 to 30 years Annual renewal fee Set by primary lender.
Interest TypeAmount $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.

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Tax Abatement Financing, Tax Rebate Financing

Agency:
Sherburne County and Cities
Dan Weber: 763-765-4901

The Minnesota State Legislature created Tax Abatement Financing as a locally controlled source of financing.

The County Board must find that Tax Abatement Financing is in the public interest because the tax abatement will meet at least one of the following criteria:

  • Increase or preserve tax base
  • Provide employment opportunities in a County
  • Provide or help acquire or construct public facilities
  • Help redevelop or renew blighted areas
  • Help provide access to services for a county’s residents
  • Finance or provide public infrastructure
  • Stabilize the tax base through equalization of property tax revenues with respect to utility property, both real and personal

The county requires that cities approve the abatement prior to the county, to ensure that the county doesn’t pre-empt city goals. The amount and term of the abatement is determined by the county board based on county policies and an application. .For additional detail and a copy of the county’s Tax Abatement Policy and application, please contact Dan Weber, Economic Development Specialist.


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Minnesota Investment Fund

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.

TermFeesInterest
Real estate a maximum of 20 years; machinery and equipment a maximum of 10 years. Negotiated Negotiated
Interest TypeAmount $
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.


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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.

TermFeesInterest
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 TypeAmount $
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.


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Becker Loan Fund

Agency:
City of Becker
Amanda Fiedler: 763-261-4411

Industrial, gap financing for fixed assets and operating capital.

TermFeesInterest
7 years max Legal fees and interest at prime Set at Prime
Interest TypeAmount $Eligibility/Requirements
Fixed Up to $100,000 Within city limits, business subsidy law requirements, in conjunction with a primary lender.

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Micro Loan Fund

Agency:
City of Elk River
Brian Beeman: 763-635-1042

Below prime loans for industrial businesses for real estate, equipment, and infrastructure costs.

TermFeesInterest
10-15 yrs 10% of loan amount 2-3 points below prime
Interest TypeAmount $Eligibility/Requirements
Fixed $100,000 Located in West Elk River and must be an industrial business. 10% equity requirement.

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Princeton Loan Fund

Agency: City of Princeton
Carie Fuhrman: 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.

TermFeesInterest
5-8 years Reimbursement of closing and administrative costs At or below market
Interest TypeAmount $Eligibility/Requirements
Fixed Up to $75,000 Be within city limits, business subsidy law requirements, job retention and/or creation and increased tax base.

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Local Revolving Loan Funds

Agency:
Elk River: Brian Beeman - 763-635-1042

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.

TermFeesInterest
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 TypeAmount $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.

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Business Loans

Agency:
Initiative Foundation
Dan Bullert, Business Finance Officer
(320) 632-9255

The Initiative Foundation offers the following business financing programs to meet diverse regional needs:

  • Direct Business Loan Fund - up to $250,000 for value-added agriculture and manufacturing companies that bring new revenue to communities.
  • Technology Capital Fund - up to $500,000 for emerging high-tech ventures and technologies that increase productivity.
  • Green Business Loan Fund - up to $250,000 for businesses that preserve the environment, reduce energy demands or recycle existing waste streams.
  • Nonprofit Loan Fund - up to $50,000 for the creation or expansion of mission-related earned-income/social enterprise activities carried out by eligible nonprofit organizations. Loan proceeds may be used for working capital, equipment acquisition and/or facility improvements.
  • Lender Match Loan Fund - up to $50,000 for manufacturing, technology, wholesale and other businesses. In partnership with financial institutions, this fund provides crucial capital to minimize the out-of-pocket cash outlay otherwise needed for a down payment on the purchase of equipment or real estate.

The Initiative Foundation places an emphasis on technology-based and green businesses as well as value-added manufacturing and agriculture operations. Nontraditional business owners such as women and minorities are especially encouraged to apply. Business loans are competitive and subject to review by staff and a volunteer committee. Loans may require 90 days to review and close based on complexity and documentation.


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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.
TermFeesInterest
n/a 1% origination fee n/a
Interest TypeAmount $
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.


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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.

TermFeesInterest
Varies Up to 2% origination fee, legal fees associated with documenting and closing the investment. Varies
Interest TypeAmount $
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.


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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.

TermFeesInterest
7 years n/a 4% or half prime rate, whichever is greater.
Interest TypeAmount $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.

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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. Tom Willett, assists startup and existing businesses with cash flow projections, loan applications, business plans, and a variety of business questions. Appointments are scheduled at 763-691-8585.


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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.

Work Opportunity Tax Credit

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.

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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.

TermFeesInterest
1-3 years n/a n/a
Interest TypeAmount $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.

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Economic Development Contact:

Sherburne County Govt Center
ATTN: Economic Development
13880 Business Center Dr NW
Elk River, MN 55330-1692

Office Location & Hours

Phone: 763-765-4901
800-438-0577
Fax: 763-765-4905

assessor@co.sherburne.mn.us