Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of Statutes

    Subdivision 1. Loans; limitations. (a) The board may make, purchase, or participate with
financial institutions in making or purchasing small business development loans not exceeding
$1,000,000 in principal amount with respect to small business loans made or purchased by the
board and not exceeding $1,000,000 principal amount with respect to the board's share when the
board participates in making or purchasing small business loans.
(b) With respect to loans that the board makes or purchases or participates in, the board may
determine or provide for their servicing, the percentage of board participation, if any, the times
the loans or participations are payable and the amounts of payment, their amount and interest
rates, their security, if any, and other terms, conditions, and provisions necessary or convenient
in connection with them and may enter into all necessary contracts and security instruments in
connection with them. The board may enter into commitments to purchase or participate with
financial institutions or other persons upon the terms, conditions, and provisions determined by it.
Loans or participations may be serviced by financial institutions or other persons designated by
the board.
(c) The board shall obtain the best available security for all loans. The board may provide for
or require the insurance or guaranteeing of the loans or board participations in whole or in part
by the federal government or a department, agency, or instrumentality of it, by an appropriate
board account, or by a private insurer.
    Subd. 2. Small business development loans; preferences. The following eligible small
businesses have preference among all business applicants for small business development loans:
(1) businesses located in rural areas of the state that are experiencing the most severe
unemployment rates in the state;
(2) businesses that are likely to expand and provide additional permanent employment in
rural areas of the state, or enhance the quality of existing jobs in those areas;
(3) businesses located in border communities that experience a competitive disadvantage
due to location;
(4) businesses that have been unable to obtain traditional financial assistance due to a
disadvantageous location, minority ownership, or other factors rather than due to the business
having been considered a poor financial risk;
(5) businesses that utilize state resources and reduce state dependence on outside resources,
and that produce products or services consistent with the long-term social and economic needs
of the state; and
(6) businesses located in designated enterprise zones, as described in section 469.168.
    Subd. 3. Local governmental unit sponsor; resolution. A business applying for a loan must
be sponsored by a resolution of the governing body of the local governmental unit within whose
jurisdiction the project is located. For purposes of this paragraph, "local governmental unit" means
a home rule charter or statutory city when the project is located in an incorporated area, a county
when the project is located in an unincorporated area, or an American Indian tribal council when
the project is located within a federally recognized American Indian reservation or community.
    Subd. 4. Exemption from limitation. If the board determines that a revenue-producing
enterprise is eligible for special assistance, the $1,000,000 limitation established in subdivision 1
does not apply.
    Subd. 5. Designation; criteria. A revenue-producing enterprise is not eligible to receive
special assistance unless the board has passed a resolution designating the revenue-producing
enterprise as being in need of special assistance. The resolution must include findings that the
designation and receipt of the special assistance will be of exceptional benefit to the state of
Minnesota in that at least three of the following criteria are met:
(1) to expand or remain in Minnesota, the revenue-producing enterprise has demonstrated
that it cannot obtain suitable financing from other sources;
(2) special assistance will enable a revenue-producing enterprise not currently located in
Minnesota to locate a facility in Minnesota that directly increases the number of jobs in the state;
(3) the revenue-producing enterprise will create or retain significant numbers of jobs in a
Minnesota community;
(4) the revenue-producing enterprise has a significant potential for growth in jobs or
economic activities in Minnesota during the ensuing five-year period; and
(5) the revenue-producing enterprise will maintain a significant level of productivity in
Minnesota during the ensuing five-year period.
    Subd. 6.[Repealed, 1988 c 615 s 7]
History: 1987 c 386 art 9 s 12; 1988 c 615 s 3-5; 2003 c 128 art 13 s 3