Small Business and Development Loan Program

Small Business and Development Loan Program Guide (PDF)

Small Business and Development Loan Program Application (PDF)


In June 2022, the EDA modified its Business and Development Loan Program to support certain economic development activities within the City of South St. Paul. This program is available to local businesses that have financing needs to support their growth and continued development in the City. The program is comprised of two unique funding “tracks”:


“Micro Loans”

The “Micro Loan” program is targeted for emerging, small businesses needing relatively a small amount of capital in the early stages of their growth. Loans may be, in certain cases, unsecured and an applicant for the Micro Loan program is not required to have also sought or received traditional financing. Some key components of the Micro Loan program include:

  • Loan amounts $1,000 - $15,000 per business
  • Interest Rate: Prime + 2.5% (currently WSJ Prime is 4.75%)
  • Loan repayment terms between 3 to 7 years
  • For businesses with 50 or fewer employees
  • Eligible uses:
    1. Working Capital
    2. Inventory
    3. Machinery/Equipment
    4. Energy upgrades
    5. Façade Improvement
    6. General Operations

 

“Gap Loans”

The “Gap Loan” program is intended as supplemental financing to a traditional bank loan which functions to decrease the primary lender’s exposure and risk by securing low-interest, subordinate financing for more significant business investments. In most cases, Gap Loans will be secured with a subordinate lien on the financed property. Key components of the Gap Loan Program include: 

  • Loan amounts $15,000 - $150,000 per business
  • Interest Rate: Base Interest Rates are fixed 5.50%, with the possibility to reduce the rate to as low as 2.50% if certain conditions are met (see Loan Program Guide)
  • Loan repayment terms between 5 to 10 years (machinery and equipment) or 10 to 20 years (real estate)
  • Eligible uses:
    1. Creation of livable wage jobs
    2. Acquisition of land and buildings
    3. New construction
    4. Façade and building renovations, including renovations to address code deficiencies
    5. Purchase of Machinery/Equipment