Business

Business Loans & Programs

A business, in order to be successful, requires some form of financing. An integral component of starting a successful business is raising sufficient capital. There are many challenges, but numerous resources are available. The EDC can help you determine what is right for you.

The Great Grant Myth

Are grants available for small businesses or business start-ups?  That is on top of the most frequently asked question list and the answer is maybe. You will not be able to start a business without investing your own savings or other assets. You will not find a bank willing to lend you 100% of what you need or a government program to fund your business. Be cautious of ads and websites that offer to find cash. Additional information on grants can be found through the SBA.

 

COVID-19 Response

COVID-19 Business Assistance Loan Program (COBAL)

In response to the COVID-19 pandemic, the EDC created an emergency assistance fund for businesses that have been forced to close or significantly reduce their operations as a result of Executive Order 20-04-1 and Executive Order 20-08 issued by Minnesota Governor Tim Walz.  The fund was recently opened for all businesses that were significantly impacted by the pandemic; a business not completely closed may be eligible. Funds are on a first-come, first-served basis. The EDC retains final authority to determine if a business is eligible or not, and whether to approve a loan or not.

Loan Conditions
  1. Maximum loan amount is $5,000. Applicants may request funding one time under this program.
  2. Interest rate will be 0% percent.
  3. Recipients will be charged a 1% loan origination fee, which will be due from the borrower at the time of closing.
  4. Loans will be for a maximum length of 24 months. Borrowers may prepay without penalty.
  5. Loan repayments may be deferred for up to six months.
  6. Repayment terms for loans will be determined on an individual basis, so long as the total principal balance is repaid within 24 months of the date of the first draw of loan funds by the borrower.
  7. Upon default of the loan, or the permanent closure or sale of the business, the loan immediately becomes due and payable in full.
  8. Loans are not transferable unless the transfer is approved by the EDC Board.
  9. Loan payment method will be automatic withdrawal (“ACH”).

EDC COVID-19 Loan Program Application

Immigrant Business Disaster Relief Grant Program

The purpose of the Immigrant Business Disaster Relief Grant Program is to provide support for immigrant small businesses to close the gap for those with the highest hurdles facing disproportionate effects of disaster.

Program

Grant funds are made available to the EDC from Southwest Initiative Foundation and the Minnesota Disaster Recovery Fund due to the Coronavirus:

  1. Applications are due to the EDC by October 15, 2020.
  2. Grants awarded will be between $500 and $750.
  3. Grant funds may be used for working capital, rent, utilities, taxes, etc.

Immigrant Business Disaster Relief Application-English

Immigrant Business Disaster Relief Application-Spanish

Immigrant Business Disaster Relief Grant Application-Karen

Immigrant Business Disaster Relief Grant Application-Somali

If you are unable to download the application form, one may be obtained from the EDC by emailing edc@kandiyohi.com or calling 320-235-7370.

Childcare

The Mid-Minnesota Development Commission has created a guide for those in Kandiyohi County seeking financial assistance for childcare businesses.  Click on the link to access the guide Childcare Financial Assistance Guide.

Childcare Business Assistance Grant

The EDC has been working with many businesses during these uncertain times of a pandemic. One way we have assisted is by giving $325 to 88 home-based childcare businesses that are registered with Kandiyohi County to help cover their expenses.

Childcare businesses play a vital role in the early education, development and care of our children, and are very valuable to our economy and vital to keeping our residents in the workforce.

The EDC’s funds were increased by a $5,000 grant received from the Willmar Area Community Foundation through its Willmar Area Response Fund.

 

EDC Loan Programs

Entrepreneurs’ Loan Guarantee Program

The EDC’s Entrepreneurs’ Loan Guarantee Program is intended to increase the availability of credit otherwise not available based on normal lender underwriting criteria due to the newness of the business, lack of equity, collateral valuation or other problems. The program is not intended to refinance existing debt nor absorb the risks associated with a weak or poorly-managed business.

Loan Guidelines
  1. The applicant must:
    • be over 18 years of age;
    • be a resident of Kandiyohi County;
    • be actively involved in the business; and
    • have at least 50% ownership in the business.
  2. The business must be owned and operated by the borrower less than 36 months and be located in Kandiyohi County.
  3. The purpose of the loan must be for general business purposes and be eligible under SBA guidelines.
  4. The minimum loan amount shall be $1,000.
  5. A business or its related entities’ combined loan amount may not exceed $50,000.
  6. The maximum guarantee shall be 80% of the outstanding principal balance of loan(s) under $25,000 and 85% of the outstanding principal balance of loans over $25,000.
  7. A loan administration fee of 1% of the loan guarantee amount shall be paid.

Entrepreneurs’ Loan Guarantee Application

Microenterprise Loan Fund

A Microenterprise Loan Fund was established by the former Willmar Area Multicultural Business Center and is now owned by the EDC. The purpose of the fund is to provide alternative (gap) financing to for-profit businesses to promote job retention, job creation and the stimulation of private investment in an effort to strengthen and diversify the economy and the tax base of Kandiyohi County. Loans will serve as matching funds to create up to 100% leverage project financing with other borrowing sources to assist existing or new businesses meeting the program eligibility. Loan money is intended to complement, not replace, existing local development and private financing efforts.

Loan Guidelines
  1. Applicants must be for-profit businesses located in Kandiyohi County, meet the eligibility guidelines of the program, and be in an eligible industry category under the Small Business Administration (SBA) guidelines.
  2. Applicants must have adequate collateral and cash flow to service the debt and show additional lending to meet up to the 100% leverage guidelines.
  3. The Committee shall recognize that adequate collateral is not a primary consideration in approving loans.
  4. Applicants must provide a minimum of 10% owner equity as part of the 100% leverage guidelines. EDC participation not to exceed 50% of total project.
  5. Applicants must provide with their application a personal credit report for principal owner(s) with 20% or more ownership.

Revolving Loan Fund

A Revolving Loan Fund through the EDC is available to provide alternative (gap) financing to for-profit businesses to promote job retention, job creation and the stimulation of private investment in an effort to strengthen and diversify the economy and the tax base of Kandiyohi County. Loans will serve as matching funds to create up to 100% leverage project financing with other borrowing sources to assist existing or new businesses meeting the program eligibility. Loan money is intended to complement, not replace, existing local development and private financing efforts.

Loan Guidelines
  1. Applicants must be for-profit businesses located in Kandiyohi County, meet the eligibility guidelines of the program, and be an eligible industry category under SBA guidelines.
  2. Applicants must have adequate collateral and cash flow to service the debt and show additional lending to meet up to 100% leverage guidelines. The EDC’s Finance Committee recognizes that adequate collateral is not a primary consideration in approving loans.
  3. Applicants must provide a minimum of 10% owner equity as part of the 100% leverage guidelines.
  4. Applicants must provide, with their application, a personal credit report for principal owner(s) with 20% or more ownership.

Revolving Loan Fund Application 

The Kandiyohi County and City of Willmar EDC supports local business growth and can assist with packaging a financing plan that best serves your business and will partner with any of the lending institutions in Kandiyohi County to provide gap financing for new and expanding businesses.

The EDC is ready to work with you on your project and make your project a reality. In addition to the EDC’s loan programs, there are other local, regional and statewide programs that we can help you access: