BUSINESS LOANS & FINANCING

Kandiyohi County Revolving Loan Fund

A Revolving Loan Fund has been established by Kandiyohi County and is administered by the Finance Committee of the Kandiyohi County and City of Willmar Economic Development Commission (EDC).

The Revolving Loan Fund is intended to be a permanent revolving loan fund where money is available for new loans on a continuing basis as loans are repaid.

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.

The interest rate will be fixed at Wall Street Journal prime rate plus 2% at the time of closing.  The interest rate will be computed as simple interest and will be fixed for a period not to exceed five years and adjusted for a similar period using the same index and margin.  All loans will be structured to fully amortize over the term of the loan.  Borrowers will be required to set up automatic payments from their checking account for the monthly loan payments under this program.

Eligible activities include:

• Fixed machinery and equipment
• Building purchase, construction and renovation
• Leasehold improvements
• Land acquisition
• Plant modernization
• Other purposes at the discretion of the Finance Committee

The loan Application should be submitted to:

Kandiyohi County and City of Willmar Economic Development Commission
333 Litchfield Avenue SW, Suite 100
P.O. Box 1783
Willmar, MN 56201

 

Revolving Loan Fund Guidelines as revised April 2010

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.
5. Applicants must provide with their application a personal credit report for principal owner(s) with 20% or more ownership.

Loan Terms

1. Minimum amount of loans—$5,000
2. Maximum amount of loans for one borrower—$25,000
3. The loan term shall be no less than 1 year and may be negotiated up to 15 years based upon the productive life of the assets.
4. EDC will take a security interest position in any equipment or real estate financed.
5. EDC will require personal guaranties of the applicant(s).
6. EDC will accept subordinate position loans.
7. The Revolving Loan Fund’s collateral must be adequately insured.
8. Recipients will be charged a 1% loan origination fee plus all costs associated with the loan.

For more information or to obtain application and business plan forms, please call your lending institution or (320) 235-7370.

Participating Kandiyohi County Banks

• Atwater State Bank, Atwater
• Bremer Bank, Willmar
• Concorde Bank - Blomkest, Willmar
• Citizens State Bank of Clara City - Lake Lillian branch
• Heritage Bank, N.A. - Pennock, Raymond, Spicer, Willmar
• Home State Bank - Kandiyohi, Willmar
• Lake Region Bank - New London, Sunburg, Willmar
• North American State Bank - Belgrade, Willmar
• PrinsBank
• United Minnesota Bank - New London
• United Prairie Bank, Spicer
• U.S. Bank, Willmar
• Wells Fargo Bank, N.A. - Willmar

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