I know what you are thinking: “This article has to be clickbait. There is no way a business is getting an interest free loan.”
But, clickbait title aside, loans for startups are currently a thing in Minnesota.
The Minnesota Department of Employment and Economic Development (DEED) is currently accepting loan applications through a new program designed to help early-stage businesses that are developing high-tech products or services in Minnesota.
Through a pilot program called Minnesota Innovation Loans for Entrepreneurs (MILE), interest-free loans ranging from $20,000 to $50,000 will be provided to qualifying businesses. The lucky recipients of these loans that are approved under the program must have a 1-to-1 match from another funder and repay the loan within four years. There is also the benefit of no payments being required in the first year. The program is an initiative of the Minnesota Investment Fund.
DEED Commissioner Shawntera Hardy had this to say about the MILE program, “MILE will encourage the growth and sustainability of startups throughout the state. The program will assist startups through the next ‘mile’ of their evolution, which is critical to the creation of quality jobs and sometimes the survival of the business.”
The use of funding isn’t set in stone and can be used for multiple types of business expenses. MILE funding may be used for working capital, intellectual property development, proof of concept activities, commercialization planning, prototype design, market feasibility studies and other startup activities as approved by DEED.
There are a few stipulations for businesses that apply for a loan through MILE. Businesses applying for loans must employ no more than five people and have their headquarters in Minnesota or plan to relocate here. They must have been in business for five years or less, completed a recent business plan, and have debt or equity investments not exceeding $1 million.
Aerospace, agricultural and food processing, biotechnology, energy efficiency and conservation, information technology, materials science, medical devices, pharmaceuticals, process control, telecommunications or similar sectors are all eligible for applying for loans. However, those applying for loans are not limited to the aforementioned industries.
Now for the list of businesses that are unable to benefit from this program. Those would be businesses whose primary activity is brick-and-mortar retail sales, professional or consulting services, direct financial or insurance services, medical or legal services, or real estate sales or development are not eligible.
The loan application period is open until July 16. Being timely is important as late applications will not be accepted.
The DEED website has more details about the Minnesota Innovation Loans for Entrepreneurs program, including application materials.
DEED is the state’s principal economic development agency, promoting business recruitment, expansion and retention, workforce development, international trade and community development. For more details about the agency and its services, visit the DEED website or follow DEED on Twitter.