ST. PAUL (Dec. 12, 2013) — Entrepreneurs are about to get a needed boost of funding to start, expand, and sustain new businesses in Minnesota.
At the state Capitol last week, Governor Mark Dayton and Commissioner Katie Clark Sieben announced on Thursday that the state has created a new $6.7 million Angel Loan Fund that will provide no-interest loans of up to $250,000 for startup businesses. Starting in early December, entrepreneurs across Minnesota can begin applying for these loans to help with business startup costs, working capital, equipment purchases, construction, inventory financing, franchise funding, and more.
The Angel Loan Fund is now one of four programs available to help small businesses under the agency’s State Small Business Credit Initiative (SSBCI). The state has set a goal of attracting at least $10 of private investment for every dollar provided through SSBCI. The programs, including the no-interest Angle Loan Fund, is expected to spur at least $150 million in lending to small businesses statewide based on U.S. Treasury requirements, and help create an additional 3,000 new jobs in Minnesota.
Given the success of SSBCI programs, the Minnesota Department of Employment and Economic Development (DEED) estimates this new investment could leverage as much as $261 million in private investment to small businesses in Minnesota over the next three years.
“Entrepreneurs who want to start new businesses and create more jobs in Minnesota should have access to as much help as we can reasonably provide,” said Governor Dayton, who twice served as Minnesota’s commissioner of economic development. “Minnesota is one of the best places in the nation to own a business, and the new Angel Loan Fund we are announcing today will help make our state an even more attractive place for new business owners to set up their operations, expand, and hire new workers.”
The state’s new Angel Loan Fund will be administered by DEED and funded using a previously underutilized portion of federal dollars available through the State Small Business Credit Initiative. By obtaining a waiver from the federal government, DEED has repurposed that funding to stimulate private sector lending and improve access to capital for small businesses that cannot obtain conventional bank loans for expansion projects and job creation.
“New businesses are the lifeblood of Minnesota’s economy, but many struggle to access capital from conventional funding sources in the early stages,” said DEED Commissioner Katie Clark Sieben. “This fund will help them leverage new funding and support their success in a competitive business environment.”
These new funds are being made available at a crucial time. Venture capital funding is at its lowest point since the 1990s, with entrepreneurs facing a tight lending market nationwide and tough competition for available capital resources.
The Angel Loan Fund is a supplement to Minnesota’s successful Angel Tax Credit, which has already delivered more than $137 million to help hundreds of startup companies across the state since that program was launched in July 2010. Businesses interested in obtaining assistance from the new Angel Loan Fund must first be certified in the Angel Tax Credit Program.
For additional information about the Angel Loan Fund, including how to be certified for consideration, visit the DEED website at www.tinyurl.com/AngelLoanFund. Interested participants also may contact Lisa Dargis for additional information and assistance by email at [email protected], or by phone at 651-259-7446 or 1-800-657-3858.
Minnesota is seeing notable economic growth that makes it a great place to start a new business. Forbes recently ranked Minnesota the eighth-best state to do business in the United States, and the U.S. Department of Labor reported Minnesota had the fifth-fastest growing economy in the nation in 2012. Over the last three years, more than 122,000 new jobs have been created in Minnesota, regaining all the jobs lost during the Great Recession. In October, Minnesota’s unemployment rate reached its lowest point since 2007; the ninth-lowest in the nation.