Jun. 1—ROCHESTER — Four Southeast Minnesota businesses were part of an initial disbursement of nearly $5 million in state-guaranteed loans for small businesses.
On Wednesday, May 31, 2023, Gov. Tim Walz and the Minnesota Department of Employment and Economic Development announced nearly $5 million in loans for 22 small businesses across Minnesota. The loans are part of a larger $100 million State Small Business Credit Initiative program intended to help small businesses grow and succeed.
"Small businesses are at the heart of our communities, our workforce, and our state's economy. By investing in small businesses, we're investing in one of our state's greatest assets," Walz said. "This funding will bolster small businesses and help Minnesota's economy continue to grow and thrive."
The loans announced Wednesday come from two of the SSBCI programs DEED is implementing: one to help companies purchase automation equipment to increase productivity in light of Minnesota's historically tight labor market, and another to help innovative seed- and early-stage technology businesses take off and grow.
As part of the
Automation Loan Participation Program
, DEED makes companion loans to cover financing gaps and expand opportunities for businesses purchasing machinery, equipment or software to increase productivity and automation. The program targets businesses with fewer than 500 employees. Companion loans from DEED must be matched at least 1-to-1 with private financing secured by the borrowing company.
In the Automation Loan Participation Program, $1,885,951 was allocated to seven businesses, with the two largest loans going to a pair of Southeast Minnesota businesses: Steuart Contract Packaging of Le Roy in Mower County, and Food Service Specialties of Red Wing. Both companies received loans of $500,000.
Growth Loan Fund Program
saw 15 businesses receive a total of $3,030,000. To qualify for the program, businesses must raise private equity in order to qualify for loans. Applicants state how much equity they intend to raise, then have 12 months to do so. If they achieve their goal, DEED provides a loan based on 20% of the total amount of equity investment raised in the funding round. Among the recipients were Nanodropper of Rochester, which received $120,000, and SAB Co. Software of Red Wing, which received $100,000.
"Small businesses are critical to Minnesota's economy — they employ three-fourths of our workers, create innovative products and services, and enliven our corporate community," said DEED Temporary Commissioner Kevin McKinnon. "DEED's goal is to help small businesses launch, expand and thrive in Minnesota, and our SSBCI loan programs help more companies enjoy success."
Both programs are still taking applications.