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DEED Launches Growth Loan Fund to provide funding for early-stage businesses

The Minnesota Department of Employment and Economic Development (DEED) launched the Growth Loan Fund today as part of the recently announced $97 million through the State Small Business Credit Initiative (SSBCI). This program provides direct loans from DEED to technologically innovative seed- and early-stage businesses.

The federal government has approved Minnesota for up to $97 million in small business financing support, which allows DEED to carry out its commitment to help small businesses grow and succeed. The Growth Loan Fund supports entrepreneurial growth throughout Minnesota.

DEED is now accepting applications from businesses seeking financing from the program.

Informational webinar

Businesses interested in participating in the Growth Loan Fund Program are invited to join a webinar with DEED officials on Friday, November 4 at 1:00 p.m.

Applicants must be seeking equity investments in a funding round that includes at least one venture capital fund or accredited investor. Loans range from $100,000 to $400,000 based on 20% of the total investment in the defined funding round, not to exceed 12 months subsequent to loan approval. The business must complete at least 70% of the proposed equity raise to remain eligible for the loan.

Eligible businesses must meet one of the following criteria: 1) been certified to participate in the Angel Tax Credit (ATC) Program; 2) be identified by a venture or angel fund for investment; or 3) be identified by an individual accredited investor for investment.

To qualify for funding through the Growth Loan Fund, businesses need to be engaged in, or be committed to engage in, technological innovation in Minnesota. The primary business activity must include one or more of the following:

• Using proprietary technology to add value to a product, process or service in a qualified high-technology field;

• Researching or developing a proprietary product, process, or service in a qualified high-technology field;

• Researching, developing, or producing a new proprietary technology for use in the fields of: agriculture, tourism, forestry, mining, manufacturing, or transportation; or

• Researching or developing a proprietary product, process or service in the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation (no technology component required).

More SSBCI programs coming throughout the fall

The other small business funding streams launching in the weeks ahead include automation loans and purchase loan participations. Additionally, a partnership with the University of Minnesota will provide opportunities for direct investment venture capital and venture capital fund investments.

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. 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, 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 or learn more at DEED.

 

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