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Loans
Business Loans
These loans are for existing small businesses that have an essential employee called to active service in the military reserves for 180 days or longer, causing a substantial economic injury to the business due to the employee's absence.
Startup Business Loans
These loans are for recently service separated veterans seeking financial assistance to start their own small businesses.
Financing and Terms
Both types of loans provide one-time, interest-free loans of $5,000 to $20,000. The loan terms are 54 months, with no repayment for the first 18 months and equal monthly payments over the remaining 36 months.
The financing comes from the program's revolving loan fund, which has a total of $400,000 available. Applications are accepted and loans disbursed until all funds are committed.
Minnesota Reservists and Veteran Business Loan Program Fact Sheet
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Business Loans Eligibility
By state law, an eligible business must be a "small business" and must:
- Be a for-profit business which is not an affiliate or subsidiary of a business dominant in its field of operations
- Have 20 or fewer full-time employees, or
- Have had less than $1 million in annual gross revenue in the preceding fiscal year, or
- Have had less than $2.5 million in annual gross revenue in the preceding fiscal year if the business is a technical or professional service
In addition, the business must be operating in Minnesota on the date that one or more essential employees received orders for active service of 180 days or more and be sustaining or likely to sustain suffering substantial economic injury.
Active service includes state active service, federally funded state active service, and federal active service.
Essential employees are defined as:
- A military reservist, and
- An owner or employee of an eligible business, and
- Someone who has managerial or technical expertise critical to the day-to-day operations of the business
To meet the criteria for "substantial economic injury," a business must be sustaining or likely to sustain an economic harm, meaning it cannot currently or anticipates future inability to:
- Meet its obligations as they mature, or
- Pay its ordinary and necessary operating expenses, or
- Manufacture, produce, market, or provide a product or service as it has ordinarily done
Startup Business Loan Eligibility
To qualify for startup loans, veterans may be beginning their business from scratch or may have already launched the business but still meet certain financial thresholds.
By state law, an eligible business must be a veteran-owned "small business" and must:
- Be majority-owned and operated by a veteran recently separated from active duty
- Be a for-profit business that is not an affiliate or subsidiary of a business dominant in its field of operations
- Have 20 or fewer full-time employees, or
- Have had less than $1 million in annual gross revenue in the preceding fiscal year, or
- Have had less than $2.5 million in annual gross revenue in the preceding fiscal year if the business is a technical or professional service
Veterans that qualify under this program must:
- Have been on active duty on or after September 11, 2001, and
- Have been separated from service under honorable conditions after having been on active duty for at least 181 consecutive days or for the full period for which called to active duty (or after reason of disability incurred while on active duty)
For More Information
Contact Karen Schwieso at 651-259-7445 or karen.schwieso@state.mn.us.
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Application Process
Our Business Loans and Startup Business Loan programs have separate criteria and application forms. Read carefully to ensure that you're downloading the application form that's right for you.
Business Loan Criteria and Application
DEED uses these criteria when determining whether an applicant is eligible for a loan:
- Is the applicant an eligible business?
- Is the employee essential?
- Is the business sustaining or likely to sustain an economic harm?
- How likely is the applicant to repay the loan?
- How likely is it that the loan will help the business prevent, remedy, or relieve the substantial economic injury shown by the applicant?
Startup Business Loan Criteria and Application
DEED uses these criteria when determining whether an applicant is eligible for a loan:
- Is the applicant a recently separated honorably discharged veteran?
- Is the business a qualifying small business?
- Does the applicant have a sound business plan?
- How likely is the applicant to repay the loan?
Process for Evaluating and Approving Loans
Business owners and recently separated veterans apply for the program's loan through the Department of Employment and Economic Development.
Generally, the entire process from application to the disbursement of the loan takes four to six weeks.
Once the loans are approved:
- DEED and applicant execute a loan agreement
- DEED and applicant execute a promissory note
- Applicant/owner provides personal guaranty of repayment
- Applicant/owner provides other security that may be required by DEED
To Obtain an Application or for More Information
Contact Karen Schwieso at 651-259-7445 or karen.schwieso@state.mn.us.
