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Minnesota Loan Guarantee Program

Businesses can now apply with enrolled lenders. DEED is still accepting applications from lenders who would like to participate in the program.

The Minnesota Loan Guarantee Program (MNLGP) provides guarantees to enrolled lenders for up to 80% of principal on loans to eligible businesses. It is part of the State Small Business Credit Initiative and helps enrolled Minnesota lenders mitigate risk so they can increase capital to small businesses located across Minnesota.

The maximum loan guarantee amount is $800,000. A fee of 0.25 percent of the guarantee amount is charged for each enrolled loan. The fee is waived for loans to qualified Socially and Economically Disadvantaged Individuals (SEDI)-Owned businesses and for loans with terms of less than one year.

Borrowers must be Minnesota-headquartered small businesses using the loan proceeds for an eligible business purpose in Minnesota. Eligible business purposes include startup costs, working capital, equipment, inventory, the purchase, construction, renovation, or tenant improvements of an eligible place of business that is not for passive real estate investment purposes, and the purchase any tangible or intangible assets except goodwill.

Funds are targeted to Minnesota businesses with fewer than 500 employees and can only be provided to businesses with fewer than 750 employees. The number of employees includes parent company and all locations. Certain business types are ineligible under SSBCI guidelines; see our FAQs for details.

Loans and lending decisions are made by enrolled lenders – no loans come directly from DEED. The guarantee is provided to the lender to help mitigate risk. Lending capital is not provided by the program. Enrolled lenders' ability to make loans is dependent on each lender's available capital.

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