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Minnesota Loan Guarantee Program

The Minnesota Loan Guarantee Program (MNLGP) is part of the State Small Business Credit Initiative (SSBCI) funding from the U.S. Department of the Treasury and is subject to SSBCI rules.

Overview

MNLGP provides guarantees to enrolled lenders for up to 80% of principal on loans to eligible businesses. The program helps enrolled lenders mitigate risk so they can increase capital to small businesses located across Minnesota.

Borrowers apply directly to enrolled lenders. Borrowers must be small businesses located in Minnesota and use the loan proceeds for an eligible business purpose in Minnesota. Eligible business purposes include startup costs, working capital, equipment, inventory, the purchase, construction, renovation, or tenant improvements of an eligible place of business that is not for passive real estate investment purposes, and the purchase any tangible or intangible assets except goodwill.

Funds are targeted to Minnesota businesses with fewer than 500 employees and can only be provided to businesses with fewer than 750 employees. The number of employees includes the parent company and all locations, regardless of whether all locations are in Minnesota. The program does not have an industry focus, but certain business types are ineligible under SSBCI guidelines – see the FAQs for details.

The maximum loan guarantee amount is $800,000. A fee of 0.25 percent of the guarantee amount is charged for each enrolled loan. The fee is waived for loans to qualified Socially and Economically Disadvantaged Individuals (SEDI)-Owned businesses and for loans with terms of less than one year.

Loans and lending decisions are made by enrolled lenders – no loans come directly from DEED. The guarantee is provided to the lender to help mitigate risk. Lending capital is not provided by the program. Enrolled lenders' ability to make loans is dependent on each lender's available capital.

  • Businesses

    Businesses seeking loans through the program apply through lenders that are enrolled in the program. Use our interactive directory to find a lender; this page will open in a new window. The directory will be updated as new lenders are added.

    Tips on navigating the directory:

    • Lenders can be filtered by Region Served, Language or Services Offered using the dropdown menus.
    • Lenders can be sorted by City by clicking on that column header.
    • Use the scroll bar next to the lender contact info to scroll through the complete list of lenders.

    DEED does not make direct loans through the program and is not responsible for lender credit decisions.

    Each lender uses its own established application and underwriting processes. The lender you choose will provide instructions on how to apply for a loan. 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.

    Eligible borrowers need to be located in Minnesota and have fewer than 500 employees. The loan must be used for eligible business purposes. The lender will request that the business certify it is compliant with SSBCI terms, including use of proceeds, that no conflict of interest exists, that no principal of the business has been convicted of a sex offense, whether the business is owned and controlled by one or more Socially and Economically Disadvantaged Individuals. The lender will also request certain demographic data for all individuals who own at least 25% of the business.

    Additional details about eligible business types and use of loan proceeds, as well as answers to other common questions about the program, are available in the list of Frequently Asked Questions under the FAQs tab.

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