EVELETH, Minnesota – Iron Range Resources and Rehabilitation (IRRRB) Commissioner Tony Sertich announced today a new Local Business Loan Guaranty program designed to assist existing businesses. This new program will be presented to the IRRR Board for approval on Friday, April 15, 2011.
The new IRRRB’s loan guaranty program would provide an IRRRB-backed financial guaranty to local banks that make loans to existing businesses within the agency’s service area.
“In meeting with area bankers and business people, it’s become clear that one of the biggest hurdles to expanding local businesses is the availability of capital,” said Sertich. “The Local Business Loan Guaranty program is a partnership between the IRRRB and local banks which makes additional financial resources available to help existing local businesses that have a good track record.”
Under the program, $1 million would be allocated to guaranty loans that area banks provide to businesses within the agency’s service area. The IRRRB would provide banks with a guaranty of 75 percent on each new bank loan to a qualifying business, up to a maximum guaranty of $75,000. Participating banks would pay the IRRRB a fee of one percent annually on each guaranty.
“By implementing this program and creating another avenue for our local businesses to gain access to capital, we’re also supporting the potential to create new jobs at these businesses,” said Sertich. “It addresses a real need for businesses that have been operating within our service area for years and are facing challenges due to the recent recession and the tightening of credit markets.”
Iron Range Resources & Rehabilitation Board (IRRRB) is a state economic development agency headquartered in Northeastern Minnesota whose vision is to promote and invest in business, community and workforce development for the betterment of the region.