Rochester Economic Development Fund
This provides funds for business development and business growth projects that facilitate growth and diversification of the local economy. EDF investments of up to $250,000 are intended to be made in projects resulting in business investment, creation/retention of living wage jobs, and generation of property tax revenue thus facilitating growth of the local economy. The EDF will also leverage business financing provided by other private/public lenders. Contact RAEDI at (507) 288-0208 for more information.
Southeastern Minnesota 504 Development, Inc.
A certified SBA company, 504 Corporation provides assistance to expanding businesses through the SBA 504 Loan Program. The program provides up to 40% of project financing at a very competitive interest rate and term. The 504 Corporation, located in Rochester, can be reached at (507) 288-6442. www.504corporation.com
In addition, the Southern Minnesota Initiative Foundation offers gap financing for qualified projects through their business loan program.
Southern Minnesota Initiative Foundation’s Business Loan Program
This program works in partnership with local lending institutions, economic development organizations, and government agencies to help “fill the gap” between available and necessary financial resources. The program funds up to $200,000 and targets economic development opportunities to 6 key areas including bioscience, renewable energy, food/agriculture, manufacturing, and healthcare. For more information, call 507-455-3215 or go to www.smifoundation.org
Tax Increment Financing
This is a method local governments use to pay for the costs of qualifying improvements necessary to create new development, redevelopment, or publicly assisted housing. The financing of the qualifying improvements is paid from the increased property taxes generated from the new development, redevelopment, or housing that would not occur “but for” such assistance. Tax increment is the difference between the existing property taxes on a parcel of land before development occurs and the increased property taxes created by the new development. The tax increment revenue is used by the local government for a term of years to assist the financing of qualifying projects.
Industrial Development Revenue Bonds
Cities and counties are authorized to issue industrial development bonds, commonly referred to as industrial revenue bonds or “IRBs," for the purpose of “paying all or part of the cost of purchasing, acquiring, constructing, improving, equipping, or remodeling facilities for commercial and manufacturing purposes.” This financing tool is designed to provide a vehicle whereby local governments can assist private companies with economic development in their community.
The Minnesota Investment Fund
This program assists expanding businesses in creating and retaining high quality jobs with an emphasis on manufacturing, technology, and professional service employment. Grants are awarded to local governments which, in turn, make loans for specific business projects or finance public infrastructure improvements. mn.gov/deed/business/financing-business/deed-programs/mif/
The Minnesota Jobs Skills Partnership
This program awards grants for cooperative education and training projects between Minnesota businesses and educational institutions. The fund provides up to $400,000 to develop and implement training programs related to creating or retaining jobs. The state awards grants to the education institution to develop and deliver training to specific business needs. Access to the full available grant depends on the formulation of the training package and is contingent on a cash or in-kind contribution match. mn.gov/deed/business/financing-business/mjsp/
Minnesota Job Creation Fund
This fund provides job creation awards of up to $500,000 and capital investment rebates of up to $500,000 for qualifying businesses. Businesses may apply through a local government where their new or expanding business will be located and must be primarily engaged in manufacturing, warehousing, distribution, IT, or other eligible activities. At a minimum, a business must:
- Invest $500,000 in real property improvements within one year of designation as a Job Creation Fund business; and,
- Create 10 new full-time, permanent jobs within two years of designation as a Job Creation Fund Business; and,
- Obtain a resolution of support from the local government where the business will be located.