MN Gets $15.5M in Fed. Funds for Small-Biz Lending
The Minnesota Department of Employment and Economic Development (DEED) said Monday that it has been awarded $15.5 million in federal funding for programs that will support small-business lending throughout the state.
The funding comes from President Barack Obama's Small Business Jobs Act. It will provide loan guarantees to lenders that make loans to Minnesota small businesses, make money available to lenders for direct loans of up to $150,000, and provide seed money for angel investment funds.
According to DEED, agency officials estimate that the programs receiving funding will serve 1,200 small businesses, attract an additional $200 million in private investment, and spur the creation of 3,000 new jobs.
“This award is great news for Minnesota businesses, which are having difficulties accessing the capital necessary to expand and provide new jobs in our state,” Governor Mark Dayton said in a statement. “President Obama's initiative will mean more jobs for Minnesota.”
DEED Commissioner Mark Phillips said in a statement that tighter lending restrictions imposed since the start of the recession have posed challenges for businesses trying to obtain the funding they need to survive during early stages of development.
“These programs will put money into the hands of small-business owners and [give] them an opportunity to grow and create jobs,” he added.
The funding is designed to fuel access to capital, so each dollar of DEED's overall financing for some programs must leverage $10 in funding by other lenders.