The Minnesota Loan Guarantee Program provides guarantees to enrolled lenders for up to 80% of the principal on loans to eligible businesses. The maximum loan guarantee amount is for up to $800,000 with a fee of 0.25% of the guarantee amount. Notably, the fee is waived for qualified Socially and Economically Disadvantaged Individuals (SEDI) and for loans with terms of less than a year. The loans and lending decisions are made by enrolled lenders rather than DEED.

• Eligibility: Must be a Minnesota-headquartered company with fewer than 750 employees, and 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 of any tangible or intangible assets except goodwill. 

• How to apply: At the time of publication, the application for lenders is available, and a directory of approved lenders will be posted on their website in the coming weeks. 

• More information: Click here to access the lender PowerPoint presentation courtesy of DEED.

The Growth Loan Fund is designed to support entrepreneurial growth throughout Minnesota, specifically companies committed to technological innovation. DEED will administer the program by providing direct loans to eligible seed and early-stage businesses. The applicant must be planning on raising equity and the loan amount will be based on the amount of equity raised in a 12-month period. The loans can range from $100,000 to $400,000 based on 20% of the total investment in a defined funding round, not to exceed 12 months.  

• Eligibility: Minnesota-based early-stage businesses that have raised less than $250,000 or slightly later-stage businesses that are not yet ready for a Series A round. The business must have fewer than 50 employees and not have been in operation for more than 10 years (20 if related to medical devices or pharmaceuticals requiring FDA approval). The business must be researching, developing, producing, or using proprietary technology, for the exact specifications, learn more here.  

• How to apply: The application is currently available, when complete it must be emailed to SSBCI.DEED@state.mn.us.

• More information: Click here to access the informational PowerPoint presentation courtesy of DEED.

The Direct Investment Venture Capital Program is administered by the University of Minnesota Office of Investment and Banking and will invest in seed and early-stage startups. The program targets key sectors like advanced manufacturing, agtech/foodtech, climate tech, life sciences, software, and technology. This is meant to bolster entrepreneurship and support growing companies. 

• Eligibility: Minnesota-based seed and early-stage startups 

• How to apply: Apply here through the University of Minnesota Office of Investments and Banking.

The Multi-Fund Venture Capital program will invest in venture capital funds that target seed and early-stage startups. The program targets key sectors like advanced manufacturing, agtech/foodtech, climate tech, life sciences, software, and technology. The venture capital funds are required to maintain compliance throughout, must follow industry risk standards, and have meaningful capital resources at risk.

• Eligibility: Minnesota-based Venture Capital Funds investing no less than 90% within the state 

• How to apply: Apply here through the University of Minnesota Office of Investments and Banking.

As a part of the Small Business Loan Participation Program, DEED will purchase 25% to 30% participations in loans made by approved non-depository Community Development Financial Institutions CDFI) and non-profit lenders. The DEED participations will range from $10,000 to $250,000 based on ratio of 4:1 of private financing to DEED, the ratio is amended to 3:1 if it’s a SEDI-owned business.  

• Eligibility: Must be a Minnesota-headquartered company with fewer than 500 employees, and 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 of any tangible or intangible assets except goodwill. 

• How to apply: At the time of publication, the application for lenders is available with a deadline of January 6, 2023. Businesses must apply directly through lenders and a directory of approved lenders will be posted on DEED’s website in January 2023.  

Through the Automation Loan Participation Program, DEED will make companion loans intended to fill gap financing needs. These can help businesses in purchasing machinery, equipment, or software that increases productivity or automation, for exact automation requirements read more in the FAQ. The DEED loan must be in conjunction with private financing equal or greater than the DEED loan. Finally, the DEED loan may be up to $500,000 with 1% interest on a 5 to 7-year term.  

• Eligibility: Minnesota-based manufacturing, distribution, technology and warehousing businesses that have less than 750 employees but targeting businesses with less than 500 employees.  
   
• How to apply: The application is currently available, when complete it must be emailed to SSBCI.DEED@state.mn.us.
   
• More information: Click here to access the informational webinar courtesy of DEED.