Starting or growing a business takes money. It can be difficult for business owners to know where to begin.
While the SBDC does not administer loan or grant programs, we help businesses assess and identify funding options and opportunities, and prepare documentation that lenders require. Our consultants have in-depth knowledge about loan programs and what lenders really need from borrowers to make a loan.
Small Business Administration
Banks and other lending institutions offer a number of SBA guaranteed loan programs to assist small businesses. While SBA itself does not make loans,
it does guarantee loans made to small businesses by private and other institutions.
SBA Guaranteed Loan Programs:
This is SBA’s primary and most flexible loan program, with financing guaranteed for a variety of general business purposes. It is designed for start-up and existing small businesses, and is delivered through commercial lending institutions.
The major types of 7(a) loans are:
This program provides long-term, fixed-rate financing to acquire fixed assets (such as real estate or equipment) for expansion or modernization. It is designed for small businesses requiring “brick and mortar” financing, and is delivered by CDCs (Certified Development Companies)—private, non-profit corporations set up to contribute to the economic development of their communities.
This program provides small (up to $35,000) short-term loans for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. It is designed for small businesses and not-for-profit child-care centers needing small-scale financing and technical assistance for start-up or expansion, and is delivered through specially designated intermediary lenders (nonprofit organizations with experience in lending and technical assistance).
This program provides low-interest loans to homeowners, renters, businesses of all sizes and most private non-profit organizations to repair or replace real estate, personal property, machinery and equipment, inventory and business assets that have been damaged or destroyed in a declared disaster.
Region Nine Development Commission
Region Nine Development Commission takes great pride in working with and on behalf of counties, cities, townships and schools throughout south central Minnesota. Since 1972, being a partner for progress has led to the development of programs and identification of solutions in the areas of aging, economic development, business development, healthy communities, transportation, community development, and leveraging regional resources.
Southern Minnesota Initiative Foundation
BioBusiness Bio Seed Fund
Supports start-up stage biobusinesses that need capital, business expertise, and networking opportunities. Funding up to $25,000.
BioBusiness Revolving Loan Program
In partnership with local lenders and government agencies, this loan program is used to “fill the gap” between available and necessary financing. Loans of up to $200,000 available and may not exceed 50 percent of hte project cost.
Entrepreneurs Small Enterprise Loan Program
Available to start or expand a manufacturing, retail or service business within the 20-county region. Loans of up to $35,000.
USDA Loan Programs
The USDA Rural Development is committed to helping improve the economy and quality of life in rural America.
- Business and Industry Guaranteed Loan (B&I) Program
- Intermediary Relending Program (IRP)
- Rural Business Enterprise Grant (RBEG) Program
- Rural Economic Development Loan and Grant (REDLG)
- Biorefinery Assistance Program Biorefinery Assistance Loan Guarantees (BIOREFINERY)
- Bioenergy Program for Advanced Biofuels
- Repowering Assistance Program
- Rural Energy for America Program/Energy Audit and Renewable Energy Development Assistant (REAP/EA & REDA)
- Rural Energy for America Program/Renewable Energy Systems/Energy Efficiency Improvement Program (REAP/RES/EEI)
- Rural Energy for America Program/Feasibility (REAP/FEASIBILITY)
- Rural Energy for America Program Guranteed Loan Program (REAP LOAN)
- Farmbill Initiatives – REAP
Local Revolving Loan Funds
Your city, county or area Economic Development Authority may offer revolving loan funds (RLF) for business development projects such as business start-up and expansion. Often, they are used to fill a financing gap in a business development project. Eligibility and terms will vary with each fund. Learn more.
What about Grants?
Looking for free money to start your small business? Despite what you may have heard, government grants are rarely available to small businesses.
Government grants are supported by your tax dollars and often tied to specific agency agendas such as the Department of Energy or the Department of Agriculture. Therefore, they require very stringent compliance and reporting measures to ensure the money is well spent. Grants are typically for nonprofit and educational organizations, not for-profit businesses. Announcements for grants will appear on grants.gov.
Some business grants may be available through state and local programs, nonprofit organizations and other groups. These grants usually are not free money, and may require the recipient to match funds or combine the grant with other forms of financing. The amount of the grant available varies with each business and each grantor.
The federal government does provide grants to small business engaged in scientific research and development (R&D) under the Small Business Innovation Research (SBIR) Program, to stimulate high-tech innovations.