Small Businesses Receive Funding to Grow and Succeed in Minnesota
Small businesses across Minnesota will receive nearly $5 million in loans through the State Small Business Lending Initiative. The initiative, designed to help small businesses grow and succeed, is part of a $100 million federal investment in small businesses.
Governor Tim Walz and the Minnesota Department of Employment and Economic Development (DEED) announced the loans on September 9th, 2021. The loans come from two of the four programs administered by DEED, aimed at making Minnesota the best possible place to start and grow a small business.
The Automation Loan Participation Program provides supplemental loans to companies purchasing machinery, equipment or software to increase productivity and automation. The Growth Loan Fund Program invests in seed and early-stage technology-innovative companies.
The loans provided will create or retain more than 5,500 private sector jobs over the next ten years. The businesses that will receive funding include manufacturing, distribution, technology, and warehousing companies located in Minnesota, with fewer than 500 employees.
Automation Loan Participation Program
Steuart Packaging Contract Le Roy will receive $500,000.00, with The Amazing Chickpea Nueva Esperanza receiving $95,835.00, TigerTough Oakdale receiving $63,988.00, Industrial Finishing Services, Inc. Perham receiving $90,225.00, Food Service Red Wing Specialties receiving $500,000.00, FIt Butters Minneapolis receiving $143,903.00, and AmeriStar Manufacturing, Inc. Mankato receiving $492,000.00. The total loans given were $1,885,951.00 and more applications from businesses seeking automation supplemental loans are still being accepted by DEED.
Early and Growth Loan Programs
Nuclear Detection Systems/NS2, Biomagnetic Sciences LLC, Process Bolt, DOCSI Minneapolis, Rochester nanodropper, ZeSa, LLC, Raise a Hood Deephaven, Eva Medtec Bloomington, Neuraworx Medical Technologies Inc. Excelsior, Renew Power Systems, Inc./RPSi Minneapolis, Morari Medical Arce Grove, NETZRO SBC Minneapolis, SAB Co. Red Wing Software and Martell Diagnostic Laboratories, Inc. Roseville are all recipients of the Growth Loan Fund Program.
The businesses must raise private capital to qualify for loans. They indicate the amount of capital they intend to raise and then have 12 months to do so, with DEED providing a loan based on 20% of the total amount of the equity investment raised. Loans amounting to $3,030,000.00 were given. DEED continues to accept applications from businesses seeking credit through the Loan Fund for Growth.
Available Lenders for the Loan Guarantee Program
DEED has also partnered with banks, credit unions, and nonprofit community lenders to provide financing to small businesses through two other SSBCI programs. DEED enrolls lenders for the Minnesota Loan Guarantee Program, whereby DEED provides guarantees to registered lenders for up to 80% of the principal of loans to eligible businesses. The Small Business Loan Participation Program purchases 25% to 30% participations in loans made by approved Community Development Financial Institutions (CDFIs) and not-for-profit lenders.
The loans offered provide significant support to small businesses in Minnesota, creating the potential for growth and success.
Additional Piece: Best Practices for Small Business Owners
Owning a small business can be a challenging yet fulfilling experience. As an entrepreneur, you have the potential to build a successful business from the ground up. However, the reality is that starting and running a small business can be risky. According to the Small Business Administration (SBA), approximately 20% of small businesses fail within their first year. Furthermore, only half of small businesses survive beyond five years.
To increase your chances for business success, it is essential to implement best practices. These include the following:
1. Develop a strong business plan: A business plan is crucial to provide direction and a roadmap for your business. It should outline your business’s purpose, target market, marketing strategy, financial projections, and growth objectives.
2. Manage finances: Review your financial statements regularly, including profit-and-loss statements and balance sheets. Ensure that your cash flow is healthy, manage your expenses and debts, and have a separate account for business finances.
3. Build a strong online presence: In today’s digital age, having an online presence is essential for any business. Create a website, build a social media following, and engage with your customers online.
4. Hire the right employees: Teamwork can make or break a business. Hire employees that share your values, have the right skills, and are a good fit for your culture.
5. Stay up-to-date with technology: Staying current with technology can provide significant benefits for small businesses. Implementing tech tools can increase productivity, make operations efficient, and improve communication with customers.
In conclusion, small businesses are the backbone of the American economy. With the right support, they can thrive, expand, and impact their communities positively. By implementing best practices and utilizing resources such as the State Small Business Lending Initiative, small business owners can increase their chances of success.
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(ABC 6 News) – Governor Tim Walz and the Minnesota Department of Employment and Economic Development (DEED) announced the state will provide nearly $5 million in loans to 22 small businesses across Minnesota.
These businesses are the first to receive funding through the new $100 million State Small Business Lending Initiative, designed to help small businesses grow and succeed.
“Small businesses are at the heart of our communities, our workforce and our state’s economy. By investing in small businesses, we are investing in one of our state’s greatest assets,” Governor Walz said. “This funding will boost small businesses and help Minnesota’s economy continue to grow and prosper.”
SSBCI is a major federally funded small business initiative to expand business access to capital. Announced last fall, the four SSBCI programs that DEED oversees will help the agency fulfill its commitment to make Minnesota the best possible place to start and grow a small business. DEED’s SSBCI programs will create or retain more than 5,500 private sector jobs over the next ten years.
The announced loans come from two of the SSBCI programs DEED is implementing: one to help businesses purchase automation equipment to increase productivity in light of Minnesota’s historically tight job market, and another to help innovative businesses from early and early stage technology to take off and grow. .
Automation Loan Participation Program:
As part of the Automation Loan Participation Program, DEED makes supplemental loans to fill financing gaps and expand opportunities for businesses purchasing machinery, equipment or software to increase productivity and automation.
Early loan recipients from the Automation Loan Participation Program include:
Commercial City Loan Amount
- Steuart Packaging Contract Le Roy $500,000.00
- The Amazing Chickpea Nueva Esperanza $95,835.00
- TigerTough Oakdale $63,988.00
- Industrial Finishing Services, Inc. Perham $90,225.00
- Food Service Red Wing Specialties $500,000.00
- FIt Butters Minneapolis $143,903.00
- AmeriStar Manufacturing, Inc. Mankato $492,000.00
- Total $1,885,951.00
Eligible borrowers include manufacturing, distribution, technology, and warehousing companies located in Minnesota. The program is aimed at companies with fewer than 500 employees.
DEED supplemental loans must be matched at least 1:1 with private financing guaranteed by the borrowing company. DEED is still accepting applications from businesses seeking automation supplemental loans.
Growth Loan Fund Program:
The Growth Loan Fund Program supports the development of start-ups in Minnesota by investing in seed and early-stage technology-innovative companies. Eligible companies must be researching or developing proprietary products or technologies in high-tech fields such as aerospace, agriculture, renewable energy, biotechnology, conservation, environmental engineering, and food technology.
Businesses signed up to receive loans from the Growth Loan Fund include:
Business City Max. loan amount
Nuclear Detection Systems / NS2 St Paul $400,000.00
Biomagnetic Sciences, LLC Eden Prairie $400,000.00
Process Bolt Minnetonka $100,000.00
DOCSI Minneapolis $100,000.00
Rochester nanodropper $120,000.00
ZeSa, LLC Minneapolis $400,000.00
Raise a Hood Deephaven $100,000.00
Eva Medtec Bloomington $200,000.00
Neuraworx Medical Technologies Inc. Excelsior $200,000.00
Renew Power Systems, Inc. / RPSi Minneapolis $160,000.00
Morari Medical Arce Grove $100,000.00
NETZRO, SBC Minneapolis $250,000.00
SAB Co. Red Wing Software $100,000.00
Martell Diagnostic Laboratories, Inc. Roseville $400,000.00
Total $3,030,000.00
Businesses must raise private capital to qualify for loans. Applicants indicate how much capital they intend to raise and then have 12 months to do so. If they achieve their goal, DEED will provide a loan based on 20% of the total amount of the equity investment raised in the financing round.
DEED continues to accept applications from businesses seeking credit through the Loan Fund for Growth.
Available Lenders for the Loan Guarantee Program
In addition to the Automation and Growth Loan programs, DEED has begun partnering with banks, credit unions, and nonprofit community lenders to provide financing to small businesses through two other SSBCI programs.
DEED continues to enroll lenders for the Minnesota Loan Guarantee Program, whereby DEED provides guarantees to registered lenders for up to 80% of the principal of loans to eligible businesses. The program helps lenders mitigate risk so they can raise capital for small businesses located throughout Minnesota. Borrowers include Minnesota-based small businesses that use loan proceeds for eligible business purposes. Lenders can be found here. Applications for Lender Enrollment are also available.
Finally, as part of the Small Business Loan Participation Program, DEED will purchase 25% to 30% participations in loans made by approved Community Development Financial Institutions (CDFIs) and not-for-profit lenders. Borrowers include Minnesota businesses with fewer than 500 employees seeking eligible business loans. DEED contracts with CDFIs and nonprofit lenders now, and eligible businesses will soon be able to find a suitable lender here.
https://www.kaaltv.com/news/top-news/5-million-to-support-22-small-businesses-across-the-state/
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