Minnesota Department of Employment and Economic Development Press Release


*For Immediate Release*




Alicia Cordes-Mayo

763-406-9965

[email protected]

 




December 5, 2022

Media Resources [ [link removed] ]

Previous Announcements [ [link removed] ]




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DEED Launches New Small Business Funding Stream, Extending More Lending to Entrepreneurs 

*St. Paul –* Today, the Minnesota Department of Employment and Economic Development (DEED) announced the final component of the $97 million State Small Business Credit Initiative (SSBCI): [ [link removed] ] the Small Business Loan Participation Program [ [link removed] ].  

As part of the program, DEED will purchase 25% to 30% participations in loans made by approved Community Development Financial Institutions (CDFIs) and nonprofit lenders. Businesses seeking loans will apply directly with enrolled lenders, which are responsible for all credit decisions and loan terms.   

DEED is now accepting proposals from eligible lenders on DEED’s Competitive Grants and Contracts page [ [link removed] ]. DEED will choose lenders through a competitive request for proposals (RFP) process and announce participants in the months ahead. 

“CDFIs and nonprofit lenders provide critical financial lifelines to businesses operated by Minnesotans facing historical financial disadvantages, including people of color, women, veterans, and those in Greater Minnesota,” said *DEED Commissioner Steve Grove*. “Through this program, DEED will help make loans to these businesses go even further, ensuring underserved entrepreneurs have the chance to build the next big thing in our state.” 

*DEED seeking lenders now; businesses will be able to apply later* 

The first phase of the Loan Participation Program is securing lenders. Interested institutions, including CDFIs and nonprofits, can submit proposals for the program now at DEED’s Competitive Grants and Contracts page. [ [link removed] ]  

In the months ahead, DEED will announce the roster of enrolled lenders. Minnesota small businesses can then apply with an approved lender.  

Eligible borrowers need to be located in Minnesota and have fewer than 500 employees. The loan must be used for eligible business purposes.  

Lending decisions will be based on the lender’s underwriting and loan evaluation criteria and are at the sole discretion of the lender. The rate, term, and collateral requirements will be set by the lender's policies. DEED does not make direct loans through the program and is not responsible for lender credit decisions. 

*Six SSBCI programs announced* 

DEED has secured a $97 million grant from the U.S. Department of Treasury to support small businesses, which allows DEED to carry out its commitment to help small businesses grow and succeed.  

Small Business Loan Participation is the sixth and final program of the new initiative. Other programs include: 


* *The **Automation Loan Participation Program* [ [link removed] ]*,* providing companion loans to fill gap financing needs for small manufacturers to purchase machinery, equipment, or software to increase productivity and automation. 

* *The **Growth Loan Fund* [ [link removed] ], providing direct loans to innovative seed- and early-stage technology businesses; 
* *The **Minnesota Loan Guarantee Program* [ [link removed] ], providing 80% loan guarantees for qualified loans made by enrolled institutions; and  
* *The **Direct Investment and Multi-Fund Investment Programs* [ [link removed] ], two venture capital programs offered by the University of Minnesota investing in Minnesota-based seed- and early-stage businesses in the advanced manufacturing, agtech/foodtech, climate tech, life sciences, software, and technology sectors. 

*Bringing it all together: a new online Small Business Hub* 

To help small businesses and startups navigate these new programs and understand the breadth of DEED's existing resources for small businesses, the agency recently launched a new online Small Business Hub [ [link removed] ]. The Hub is designed to help entrepreneurs navigate agency resources to start and grow their businesses. It provides resources and expertise for small business owners looking to launch in Minnesota, along with a comprehensive list of DEED program offerings to help entrepreneurs thrive. 

It can be found at *joinusmn.com/smallbusiness*. 

The creation of one-stop shop resources was one of the recommendations of the Governor's Council on Economic Expansion [ [link removed] ], which advocated for increased focus from the agency to help small business growth. That recommendation will remain a key priority of the Walz-Flanagan administration across the enterprise. 

For more information about SSBCI, visit Treasury's SSCBI page [ [link removed] ] or learn more at DEED [ [link removed] ]. 

*About the State Small Business Credit Initiative* 

SSBCI was part of the American Rescue Plan Act (ARPA) of 2021 and included $10 billion for state, territory and tribal business finance programs. This is the second SSBCI initiative – Minnesota received $15 million through the Small Business Jobs Act of 2010. 

"DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website [ [link removed] ], the JoinUsMn.com [ [link removed] ] website, or follow us on Twitter [ [link removed] ]."

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"Upon request, this information can be made available in alternate formats for people with disabilities by contacting the DEED Communications Office at 651-259-7161."





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