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Minnesota Loan Guarantee Program

The Minnesota Loan Guarantee Program (MNLGP) is part of the State Small Business Credit Initiative (SSBCI) funding from the U.S. Department of the Treasury and is subject to SSBCI rules.

MNLGP provides guarantees to enrolled lenders for up to 80% of principal on loans to eligible businesses. The program helps enrolled lenders mitigate risk so they can increase capital to small businesses located across Minnesota.

Borrowers apply directly to enrolled lenders. Borrowers must be small businesses located in Minnesota and use 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 the parent company and all locations, regardless of whether all locations are in Minnesota. The program does not have an industry focus, but certain business types are ineligible under SSBCI guidelines – see the FAQs for details.

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.

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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