DEED Unveils Small Biz Funding Programs

DEED will allocate up to $15.4 million for four new programs that aim to improve access to capital for small businesses.

The Minnesota Department of Employment and Economic Development (DEED) on Tuesday unveiled four small-business funding programs that will collectively receive up to $15.4 million.

The four new programs are part of DEED's State Small Business Credit Initiative (SSBCI), which aims to stimulate lending to companies that are creditworthy but having trouble getting loans to expand. The initiative uses federal money available through the Small Business Jobs Act that President Barack Obama signed in September 2010.

DEED said the goal is to attract $10 in private investments for each federal dollar invested through the new programs.

The four new programs are:

¥ The Capital Access Program: Banks, credit unions, and community development finance institutions operating in the state can participate in the program in order to provide loans to Minnesota businesses with up to 500 employees.

¥ Emerging Entrepreneurs Fund: Will primarily lend to small businesses with fewer than 50 employees, targeting minority- and women-owned businesses and those located in economically distressed areas.

¥ Small Business Loan Guarantees: Will guarantee up to 70 percent of a loan made by Minnesota-based nonprofit lenders, including community development corporations. The loans must be made to companies with no more than 500 employees.

¥ Early Stage Fund: Will aim to stimulate investment in innovative businesses by extending capital to community-based equity funds.

The Capital Access Program, Emerging Entrepreneurs Fund, and Small Business Loan Guarantees are available immediately. The Early Stage Fund will roll out in early 2012, DEED said.

“This is an essential part of helping small businesses grow, adding jobs, and getting Minnesotans back to work,” DEED Commissioner Mark Phillips said in a statement. “We expect the SSBCI to spur more than $150 million in lending to small businesses statewide, resulting in more than 3,000 new jobs.”

Meanwhile, in a separate announcement, DEED said that it awarded $2.2 million in grants to 585 workers who were laid off at eight Minnesota businesses. The grants-provided through DEED's Dislocated Worker Program-are meant to help laid-off workers as they search for new jobs.

The workers who received the grants were recently laid off by Lowe's, Superior Plating, Inc., Cerenity Senior Care Center, G&D Integrated, Mesaba Airlines, Verso Paper, and Reynolds Food Packaging.

To view DEED's news release, which contains contact information for employees affected by the layoffs, click here.