Small Business and Development Loan Program

 Download the Small Business and Development Loan Program Guide (PDF) 

 Download the Small Business and Development Loan Program Application (PDF) 

In June 2022, the EDA modified its Business and Development Loan Program to support economic development activities within South St. Paul. This program provides financing options for local businesses to support their growth and continued development. The program consists of two funding tracks:

Micro Loans

The Micro Loan program is designed for emerging small businesses that need a small amount of capital in the early stages of growth. In some cases, loans may be unsecured, and applicants are not required to seek traditional financing. Key components of the Micro Loan program include:

• Loans range from $1,000 to $15,000 per business.
• Interest rate: WSJ Prime Rate + 2.5%.
• Repayment terms range from 3 to 7 years.
• Available to businesses with 50 or fewer employees.
• Eligible uses:
  • Working capital
  • Inventory
  • Machinery and equipment
  • Energy upgrades
  • Façade improvements
  • General operations

Gap Loans

The Gap Loan program provides supplemental financing to traditional bank loans, reducing lender risk by securing low-interest, subordinate financing for larger 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:

• Loans range from $15,000 to $150,000 per business.
• Interest rate: Base rate fixed at 5.50%, with potential reductions to as low as 2.50% based on certain conditions (see Loan Program Guide).
• Repayment terms:
  • 5 to 10 years for machinery and equipment.
  • 10 to 20 years for real estate.
• Eligible uses:
  • Creation of livable-wage jobs.
  • Acquisition of land and buildings.
  • New construction.
  • Façade and building renovations, including code compliance improvements.
  • Purchase of machinery and equipment.