Business Resources

Agricultural Utilization Research Institute (AURI)

12298 350th Ave. P.O. Box 251 

Waseca , MN 56093-0251  

Located: Experiment Station Annex

Phone: (507) 835-8990 Fax: (507) 537-7441

Web Site: www.auri.org   

AURI provides expertise and assistance to increase value, demand and market opportunities for agriculturally-based products. The Product Development Services (PDS) program is intended to produce value-added products. The PDS program is a grant program, which focuses on developing, in concert with AURI staff, a salable product, process or production technology to enhance a feasible product. AURI personnel, labs and pilot plants are available to assist a Minnesota-based client.

AURI’s professional and technical staff offers technical and business development assistance, including, but not limited to: 

Technical Feasibility: A project may focus on new or improved process technology or on development of new value-added food or non-food agricultural products. The project may include an evaluation of the product's technical soundness and quality. 

Economic or Market Feasibility: If an applicant is developing an agricultural-based product or technology with AURI assistance, a study may be cost-shared to examine the market potential and/commercialization. This study would identify specific obstacles to commercialization and address potential solutions. To have access to funding, an applicant must be an AURI client receiving technical assistance. 

AURI technologists/scientists are available to provide consulting and technical services with respect to product and process development; product evaluation and testing; and sourcing materials, equipment and services. 

AURI pilot plants and labs are available, on a confidential basis, to assist in product and process development, scale-up, nutritional assessment and production for market assessment. 

Types of Assistance Available Through the Product Development Services Program.  

The focus of the PDS program is AURI providing in-house lab facilities, pilot plants, and technical and business consulting that are enhanced by grant funds. Services, which may be provided by AURI staff include, but are not limited to: 

The PDS program is available to an applicant who can demonstrate the project will impact the use of an existing agricultural commodity or commodities, alternative crop or crops, or livestock. The PDS program is designed to add value to an agricultural commodity or commodities and to foster long-term economic growth, but is not intended for crop or livestock production. The project and its proposed benefits must impact commodities produced and/or processed in Minnesota . 

Prerequisites 

The project for which PDS funding is sought must use a Minnesota grown commodity and must be deemed as having commercial viability by the staff of AURI. Recipients of funding must actively work with AURI staff to develop a product or process prior to funding approval. 

Tri-County Electric Cooperative

210 West Jessie Street

P.O. Box 626 

Rushford, MN 55971

TEL: 1-800-432-2285

FAX: 507-864-2871

Contact: Ted Kjos, Manager of Member Services and Marketing 

E-Mail: tkjos@tec-rec.com

Web site: www.tec.coop 

Tri-County Electric Cooperative is committed to creating and retaining existing jobs and stimulating economic growth through gap financing to assist new or expanding businesses, industry and small communities. In addition to competitive rates, energy expertise and reliable service, Tri-County Electric provides a number of support services including energy audits, low-interest loan funds, various rebate programs, power supply systems, training for employees, safety programs, and various support programs for marketing area communities. 

Southeastern MN Development Corporation

111 West Jessie St .

P.O. Box 684

Rushford, MN 55971

TEL: 507-864-7557

FAX: 507-864-2091

Contact: Ron Zeigler, CEO/President

Web Site: www.semdc.com 

MISSION:  SEMDC's primary role/mission has been to participate in projects that will aid, assist and promote the growth of communities and small business concerns through the creation of job opportunities for low income people. 

AREAS OF SPECIALTY 

Loan Packaging: Assisting businesses with the completion of loan applications to a variety of public and private sector agencies. 

Strategic Planning: Assist local development groups who need support in developing local economic development plans. 

Grant Writing Services: Assistance in writing and packaging grant proposals to various local, state and federal funded sources. 

Grant Administration: Assist local communities who are in need of assistance in carrying out funded program objectives. 

Loan Analysis Services: Assist local development loan boards in making loan credit decisions. 

Economic Development Staff Support Functions:  The corporation provides staff support to local and county groups in need of project implementation services as well as community wide surveys and needs assessment activities. 

Micro-enterprise Program Service Provider:  Provide technical assistance for 'micro-businesses' in planning for expansions. 

Housing Development Assistance:  Assist communities with developing a plan to assess and address local housing needs. Facilitate project development as needed. 

Regional Revolving Loan Fund:  Established through a partnership with DTED, Tri-County Electric, Ace Communications and eight communities.  

SPECIAL SERVICES 

Community Support Program:  An alternative to communities in hiring their own local development professional. SEMDC provides on-site staff on a 'scaleable' basis encouraging cities to become part of the agency's coordinated development program. 

Small Business Development Center: The Corporation seeks to match business firms with qualified consultants who can assist with designing a business plan, marketing plan, sales projections, and applying for expansion of start-up loans. General business information/publications are available.  

COSTS 

There are no charges for services. The corporation receives financial support from foundation, Utilities, counties, cities, banks, local development corporations and individuals. Extended services requiring contracts are completed through the agency's wholly owned subsidiary, Southeast Consultants, Inc. 

Minnesota Department of Trade and Economic Development

500 Metro Square

121 7th Place East

St. Paul, MN 55101-2146

TEL: 1-800-657-3858

FAX: 1-651-296-1290

Contact: Dently Haugesage

E-Mail: dentley.haugesage@state.mn.us

Web Site: www.dted.state.mn.us

DTED helps Minnesota businesses to grow and expand, while simultaneously supporting new entrepreneurial enterprises and attracting new businesses to the state. Department services include business financing and incentive funding, site selection, project coordination and technical assistance. DTED also provides information on customized training, state and local financial resources and international trade assistance. 

We view business development as a multi-dimensional enterprise that encompasses workforce issues along with rural economic diversity, telecommunications and transportation infrastructure. By working collaboratively and engaging both the public and private sectors at every level, DTED achieves tangible and measurable results. 

Minnesota Technology, Inc.

1030 East Bridge Street

Redwood Falls, MN 56283

Phone: (507) 637-2010

Fax: (507) 637-5929

Web Site: http://www.minnesotatechnology.org/

Minnesota Technology, Inc. offers growth-oriented companies the right solution for their business needs. We'll work with you to identify competitive and technical barriers, secure expertise and manage projects that streamline processes, improve product quality and reduce costs. Our staff of over 50 industry, business and technology specialists has expertise in manufacturing, technology, engineering, environmental performance, operations, management and marketing areas. We've helped more than 4,000 manufacturing and technology-based companies improve their businesses, adding $500 million to their bottom lines. 

Technology Cluster Initiative: Minnesota Technology, Inc. (MTI) is investing $3 million during the next two years to support the development of existing and emerging technology-focused clusters in the state. Minnesota businesses are invited to work together and with other partners to seek funding for specific industry clusters in a Request for Proposals (RFP) process to be launched by MTI this summer.   

Lean Enterprise Assistance: Expanding your business? Developing new products? Need new technology? Want to improve your productivity? If you're a growth-oriented, Minnesota company, our experienced manufacturing specialists will come to your door to help on-site and hands-on. We'll work with you to identify competitive barriers, secure expertise and manage projects that streamline processes, improve product quality and reduce manufacturing costs, rework, inventory and waste.   

Advanced Technology: We help Minnesota companies bring new products to market and implement critical technological advances in their processes by using technology developed locally, nationally and internationally. 

Along with our Technology Transfer Specialists, experts from around the globe can work one-on-one with companies to identify opportunities and offer solutions that can also dramatically improve existing products or processes. We can facilitate work with private research institutions, federal labs, the University of Minnesota and Minnesota State Colleges and Universities. 

Southeast Minnesota Initiative Foundation

525 Florence Avenue

PH: 507-455-3215

Fax: 507-455-2098

E-Mail: info@smifoundation.org

Web Site www.smifoundation.org

Southern Minnesota Initiative Foundation's goal is to engage people in the economic and civic life of our communities. The Foundation’s grants, loans, programming and technical assistance focuses on community youth, workforce and business. The foundation serves 20 counties in Southeastern Minnesota. 

Key areas and activities in the business area consist of providing management assistance, technical training, support for entrepreneurs and new business ventures. This business focus helps renew the region’s economic base and develops alternative income opportunities that foster positive economic environments, which maintain healthy, stable communities. 

The Foundation also provides financial capital for business start-ups and expansions to create livable wage jobs and sustain income opportunities. Loan programs include: the Revolving Loan Fund, with a maximum loan amount of $200,000 and is limited to 50 percent of the project; and the Small-Enterprise Loan Fund provides loans up to $35,000 to start-up entrepreneurs or to small business owners located in the 20-county area. The Step-Up Loan Program is The Foundation's childcare loan and technical assistance program. The program provides loans to home-based providers and childcare centers ranging from $500 to $200,000. 

In addition to the above loan programs, The Foundation offers the following technical assistance programs: 

For more information, contact patrick@smifoundation.org  or call 507-455.32 ext. 101. 

Additional details regarding the above programs and more can be found on The Foundation’s web site at www.smifoundation.org. All applications for programs can also be found on-line. The Southern Minnesota Initiative Foundation is an equal opportunity lender. 

Southeastern MN 504 Development, Inc.

220 South Broadway, Suite 100

Rochester, Minnesota 55904

Phone: 507/288-6442

Fax: 507/282-8960

E-Mail: dwaynelee@qwest.net 

The SBA 504 LOAN PROGRAM is available to for profit businesses. The net worth of the business should be less than $6 million and profits less than $2 million. Projects must either create one job per $35,000 of SBA loan, be a manufacturer, be located in rural area, or meet one of SBA’s other public policy goals. Limitation on personal liquid assets of owners.

Structure: First Mortgage Lender (FML) 50% (1st mortgage/lien)  SBA 504 Loan (SBA)  40% (2nd mortgage/lien)  Business Injection 10%   

Limitations: SBA loan is decreased and business' injection is increased by 5% when the business is less than 2 years old or the facility is a special use facility (i.e.; a one year old business constructing a special use facility is required to have a 20% injection and limited to an SBA 504 Loan of no more than 30% of the project cost). FML must finance 50% of the project costs for these two types of projects.   

SBA Min./Max.: SBA 504 Loan minimum of $50,000 and maximum of $1,300,000. SBA can not exceed the FML's loan or 40% of the project costs. The 40% is reduced to 30% or 35% for start ups and/or special use facilities. 

Use of Proceeds: Land, building, and equipment (minimum useful life of 10 years). 

Term of Loan: SBA terms of 10 and 20 years. FML minimum term of 7 and 10 years.   SBA’s average effective fixed interest rate is about 3.0% over a 10 year T-Bill. FML interest rate is negotiated between FML and business. 

Guaranty: Owners of 20% or more are required to personally guarantee the loan. Less than 20% may be required to guarantee part or all of the 504 loan. 

SBA Loan Costs: 1) One time fee of .5% of the FML's loan.; One time fee of about 2.8% of the SBA 504 Loan. The 2.8% is the cost of selling these loan. This fee is rolled into the 504 loan; 

Closing costs of approximately $2,500 to $4,500 for filing fees, document preparation, attorney fees, etc. The SBA 504 Loan will finance up to $2,500 of these closing costs. 

Credit Criteria: FML and SBA loans cannot exceed 90% of the project cost and collateral value. Cash flow greater than debt service. Strong management capabilities. Proforma debt to equity ratio reasonable for industry. 

Small Business Administration

Regional Small Business Development Center

851 30th Avenue SE

Rochester, MN 55904-4999

Ph: 507-285-7425   

Toll Free: 1-800-247-1296   

E-Mail: michelle.pyfferoen@roch.edu   

SBA Web site: www.sba.gov   

Loan Programs:   The 7(a) Loan Guaranty Program is one of SBA's primary lending programs. It provides loans to small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA -- the Agency has no funds for direct lending or grants. 

Most lenders are familiar with SBA loan programs so interested applicants should contact their local lender for further information and assistance in the SBA loan application process. Information on SBA loan programs, as well as the management counseling and training services offered by the Agency, is also available from the local SBA office. 

Effective December 22, 2000 , a maximum loan amount of $2 million has been established for 7(a) loans. However, the maximum dollar amount the SBA can guaranty is generally $1 million. Small loans carry a maximum guaranty of 85 percent. Loans are considered small if the gross loan amount is $150,000 or less. For loans greater than $150,000, the maximum guaranty is 75 percent. 

SBALowDoc Loan Program Interest Rates: Interest rates are negotiated between the borrower and the lender but are subject to SBA maximums, which are pegged to the Prime Rate. 

Interest rates may be fixed or variable. Fixed rate loans of $50,000 or more must not exceed Prime Plus 2.25 percent if the maturity is less than 7 years, and Prime Plus 2.75 percent if the maturity is 7 years or more. 

For loans between $25,000 and $50.000, maximum rates must not exceed Prime Plus 3.25 percent if the maturity is less than 7 years, and Prime Plus 3.75 percent if the maturity is 7 years or more. 

For loans of $25,000 or less, the maximum interest rate must not exceed Prime Plus 4.25 percent if the maturity is less than 7 years, and Prime Plus 4.75 percent, if the maturity is 7 years or more. 

Variable rate loans may be pegged to either the lowest prime rate or the SBA optional peg rate. The optional peg rate is a weighted average of rates the federal government pays for loans with maturities similar to the average SBA loan. It is calculated quarterly and published in the "Federal Register." The lender and the borrower negotiate the amount of the spread which will be added to the base rate. An adjustment period is selected which will identify the frequency at which the note rate will change. It must be no more often than monthly and must be consistent, (e.g., monthly, quarterly, semiannually, annually or any other defined, consistent period). 

FEES ASSOCIATED WITH SBA LOANS 

To offset the costs of the SBA's loan programs to the taxpayer, the Agency charges lenders a guaranty and a servicing fee for each loan approved. These fees can be passed on to the borrower once they have been paid by the lender. The amount of the fees are determined by the amount of the loan guaranty. 

Effective October 1, 2002 , when the loan amount is $150,000 or less, the guaranty fee will be 1 percent of the guaranteed portion. Lenders are permitted to retain 25 percent of this fee (50 basis points). This is only applicable to loans of $150,000 or less. For loans more than $150,000 but up to and including $700,000, a 2.5 percent guaranty fee will be charged. For loans greater than $700,000, a 3.5 percent guaranty fee will be charged. 

In addition, all loans will be subject to a fifty basis point (0.5%) annualized servicing fee, which is applied to the outstanding balance of SBA's guaranteed portion of the loan. 

PROHIBITED FEES

Processing fees, origination fees, application fees, points, brokerage fees, bonus points, and other fees that could be charged to an SBA loan applicant are prohibited. The only time a commitment fee may be charged is for a loan made under the Export Working Capital Loan Program. 

GUARANTY PERCENTS 

For those applicants that meet the SBA's credit and eligibility standards, the Agency can guaranty up to 85 percent of loans of $150,000 and less, and up to 75 percent of loans above $150,000 (generally up to a maximum guaranty amount of $1,000,000). 

SBA Express Loan Program

Collateral: The SBA's general collateral policy requires guaranteed loans to be fully secured; with SBAExpress, lenders are not required to take collateral for loans up to $25,000 and may use their existing collateral policy for loans over $25,000 up to $150,000. 

Maturity: Loan maturity generally depends on the borrower's ability to repay and the use of the loan proceeds. But note the new SBAExpress allows revolving loans up to 7 years with maturity extensions permitted at the outset. \

Interest Rates: Lenders and borrowers can negotiate the interest rate. Rates are tied to the prime rate (as published in the Wall Street Journal) and may be fixed or variable, but they may not exceed SBA maximums: 

Maximum Loan Amount: The maximum loan amount for SBAExpress is $250,000. 

SBA Export Express 

A Loan Program for Small Business Exporters SBA Export Express helps small businesses that have exporting potential, but need funds to buy or produce goods, and/or to provide services, for export. Loan proceeds may be used for most business purposes, including expansion, equipment purchases, working capital, inventory or real estate acquisitions. 

SBA Export Express loans are available to persons who meet the normal requirements for an SBA business loan guaranty. Loan applicants must also – 

The SBA guaranty encourages lenders to make loans to small business exporters that they might not make on their own. The SBA’s Export Express guaranty is 85 percent for loans up to $150,000 and 75 percent for loans more than $150,000 up to a maximum loan amount of $250,000. The maximum loan amount under Export Express is $250,000. 

Interest rates are negotiated between the borrower and the lender. Rates can either be fixed or variable, and are tied to the prime rate as published in The Wall Street Journal. Lenders may charge up to 6.5 percent over prime rate for loans of $50,000 or less and up to 4.5 percent over the prime rate for loans over $50,000. Like most 7(a) loans, the maturity of an SBA Export Express term loan is usually five to 10 years for working capital, 10 to 15 years for machinery and equipment (not to exceed the useful life of the equipment), and up to 25 years for real estate. The maturity for revolving lines of credit may not exceed five years. The guaranty and servicing fees under SBA Export Express are the same as for regular SBA 7(a) guaranty loans. 

Community Express 

Similar to SBAExpress, but 

Participants use mostly own documents and procedures Loans centrally processed in Sacramento within 36 hours Applications may be processed via fax or Internet Loans will be centrally serviced by Fresno or Little Rock Program presently limited to selected lenders and areas (Your local SBA office can advise which lenders and which areas are eligible.) 

Similar to SBAExpress, lenders may approve unsecured loans up to $25,000. For loans over $25,000, lenders may follow their existing collateral policy. 

Loan maturity generally is five to 10 years, and up to 25 years for fixed-asset loans. Length of time for repayment depends on the borrower's ability to repay and the use of the loan proceeds. 

Lenders and borrowers can negotiate the interest rate. Rates are tied to the prime rate (as published in the Wall Street Journal) and may be fixed or variable, but they may not exceed SBA maximums:

Loans under $50,000 may be subject to slightly higher rates. 

Maximum Loan Amount 

For More Information on the all of the above programs and additional programs please refer to the Small Business Administration's web site.