New Minnesota loan fund geared toward start-up firmsST. PAUL, Minn. (AP) — Minnesota officials announced a new loan fund Thursday that offers start-up businesses up to $250,000 in interest-free help.
ST. PAUL, Minn. (AP) — Minnesota officials announced a new loan fund Thursday that offers start-up businesses up to $250,000 in interest-free help.
Gov. Mark Dayton and his top economic development official described the Angel Loan Fund, which was established using federal money but administered by state officials. It is a supplement to a similarly named tax credit that is meant to incentivize private investment in companies just getting off the ground.
Entrepreneurs creating Minnesota-based businesses with fewer than 500 employees can tap into the $6.7 million loan fund to help with equipment purchases, construction and other needs. They don't have to pay it back for seven years, when a balloon payment comes due.
Department of Employment and Economic Development Commissioner Katie Clark Sieben said the goal is to have businesses attract private investment of $10 for every public dollar put in.
"That 0 percent interest loan can of up to $250,000 can be a critical piece those companies need at the early stage of development," she said, adding that some start-ups have trouble qualifying for conventional bank loans.
Sieben said there are safeguards in the loan agreements to protect the state in case a start-up company with a loan doesn't succeed.
Minnesota had to get a waiver from the federal government to establish the loan fund.