The Red Lake County Economic Development Corporation created the Revolving Loan Fund to assist the potential small business owner or present small business owner of Red Lake County. It is our belief that economic growth will be served through small business job creation. This program is specifically designed to aid in the start up or expansion of local business. This results in local jobs and local spending, which in turn creates more jobs.

Interest on loans under this program will be 4% and will be reviewed annually. The loan cannot exceed $15,000 with a maximum term of 5 years. The business must be located in Red Lake County.

LOAN CRITERIA

It is the goal of this program that any loan made will assist in the diversification of the local economy and will enhance the local tax base. The basic criteria that must be met in order to qualify for this program are listed below. Meeting these criteria does not guarantee the loan will be approved. Loans will only be made based on a sound business standards and practices.

1. Jobs must be created or retained.
2. The jobs must be viable in the future.
3. Personal equity is required on all loans.
4. Personal guarantees are required on all loans.
5. Projected cash flow must be sufficient to survive debt.
6. Owners/Investors not involved directly in the operation cannot take monetary compesation if it will put the company in a loss situation.

LOAN PROCEDURE

1. The participant will submit a business plan to the loan committee.
2. The committee will suggest changes or pass the loan with their recommendations to full EDC for final action.

PROGRAM PURPOSE

1. To provide gap financing to project where there exists a funding gap between what the private lenders are willing to lend, the amount of equity which is available, and the total project cost.
2. To have available monies which are to be loaned at a lower interest rate than market rates (at a date of approved loan).
3. To mobilize public-private partnerships for economic development in Red Lake County.
4. To assist new and expanding businesses (not to refinance a business).

DEFINITIONS

LENDER - refers to any private lending institution(s) involved in this business development project.

BORROWER - refers to the proprietor, partnership, corporation, or other entity requesting funding from the county.

EDC - refers to the Red Lake County Economic Development Corporation.

REVOLVING LOAN - refers to the Red Lake County Revolving Loan Fund and its monies.

PRIVATE INVESTMENT - refers to the amount of non-county funds raised for the project.

GAP - refers to the difference between the total project cost and the amount of private investment.

BASIC LOAN CRITERIA:

The project must be located within the corporate limits of Red Lake County.

The Revolving Loan Fund shall not exceed one-fourth (1/4) of the total project cost.

Jobs must be created or retained (not including the owners position). The guideline is one full time equivalent job for every $7,000 loaned. However, this may be modified, depending on the particulars of the situation.

The loan will be up to a maximum of $15,000.

The revolving loan fund is not to be used for purchase of real assets, equipment, inventory, and working capital.

Before approving any loan the EDC will take into consideration the effect on existing businesses, which may be in direct competition.

APPROVAL CONSIDERATIONS

Because of the limited amount of funds available, the loan committee of the EDC will take many things into consideration when asked to approve a loan. While the following points are not restrictions, they are examples of parameters that are measured when deciding whether a project meets the goals of the Revolving Loan Fund.

• Jobs would be created for the unemployed and/or underemployed.
• This type of business will help to diversify the local economy.
• The local tax base would be enhanced.

Red Lake County Economic Development Corporation Board of Directors
P.O. Box 279
Red Lake Falls, MN 56750

District I (Nancy Haglund)
Reed Engelstad (Red Lake Falls) 
Nancy Haglund - President (Red Lake Falls)
Louie Schafer (Red Lake Falls)

District II (Ron Weiss)
Kevin Amiot - Vice President (Red Lake Falls)
Chris Van Emmerik - Secretary (Red Lake Falls)
David Vatthauer (Red Lake Falls)

District III (Edward Larson)
Betty Halvorson (Oklee)
Clay Haugen - Treasurer (Oklee)
Sheryl Wilde (Oklee)

District IV (Velma Oakland)
Michelle Spurgin (Red Lake Falls)
Barry Schultz (Red Lake Falls)
Ed Dahle (Red Lake Falls)

District V (Brent Strand)
Joyce Morinville (Brooks)
Lowell Hamrum (Brooks)
Brent Strand (Brooks)

For more information call 1-218-253-2897 or 1-218-253-2394
(Nancy Haglund)

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