1. Summary

Program Purpose:

To promote the rejuvenation of existing commercial buildings within the City of Owatonna through renovation and remodeling. This loan can be used in conjunction with other EDA loans provided the requirements of those loans are also met.
Eligibility and Design Guidelines:

Eligible applicants are owners or renters of commercial buildings within the City of Owatonna. Improvements may include removal of false façade, exterior restoration, painting, windows, signage, tuck pointing, & other structure improvements which preserve and/or enhance the original architectural lines/styles of the building. Interior renovations are also eligible.

If the proposed property is located in the “Central Business District" of Downtown Owatonna. Improvements must comply with the Main Street Owatonna Design Guidelines, which can be downloaded here.

Applications are accepted on an on-going basis.
  • Projects must be completed with paid invoices submitted for reimbursement within 6 months of approval.
  • Projects cannot be for construction of new buildings.
  • All projects must be in compliance with applicable codes and policies.
  • Loans will be made on a “one-time” basis for each building, meaning there can only be one set of Tier 1 and/or Tier 2 loans for a building at any particular time. Businesses occupying more than one building will be considered as one building, and a building containing more than one business will be considered as one building for loan evaluation purposes.
  • Once all loans have been fully repaid, the building is eligible to reapply for a new loan.
  • Loan must be approved before the project starts.
Loan Terms:

The Low Documentation ("Low Doc") Loan Program has two Tiers, with different terms:

  • Tier 1: $1,000 minimum, up to a maximum of $5,000.
  • Tier 2: up to $20,000 (in addition to a Tier 1 loan).
  • Maximum of $25,000 combined.
Matching Funds: 50% of total project cost must be privately financed through owner equity and other lending sources.

Interest Rate:
  • Tier 1: 0%.
  • Tier 2: One half (1/2) of prime interest rate the day the application is submitted (currently 4.25% (WSJ Prime = 8.5%) as of 3/22/24).
Minimum monthly payments of $100. As part of loan closing, payment will be established by A.C.H. for automatic check withdrawal from the borrowers checking account. Level monthly payment schedule.

Repayment Period:
  • Tier 1: not to exceed 3 years.
  • Tier 2: not to exceed 7 years.
  • The borrower’s contribution toward matching funds may be in the form of “sweat equity,” but only if the value of this equity is substantiated by a bid in writing from a disinterested third party.
  • If the applicant completes a project but doesn’t use the entire amount available for their loan, they are required to reapply with a new project to utilize the remainder of the potential Low Doc $25,000 combined allocated for the building.

Disbursement of Funds:

Funds are reimbursed once the project is completed, at 50% of the submitted paid receipts (up to the project totals listed above). Loan funds must be disbursed in full within 180 days of loan approval.


All loans require personal guarantee, junior mortgage on building, and/or assets as collateral, regardless of business structure.
Approving Authority:

The Owatonna Economic Development Authority, upon recommendation of its loan committee, maintains the authority to approve or deny any loan application.

The loan committee will evaluate the project application in terms of the following:
  • Project Design – Evaluation of project design will include review of the plans to determine if the proposed changes are in keeping with the original architectural lines/styles of the building.
  • Financial Feasibility – Availability of funds, private involvement, financial packaging, and cost effectiveness.
    • Ratio of private funds to loan amount is 1:1 or greater.
    • Sufficient cash flow to cover proposed debt service as demonstrated by financial information.
    • Business to be assisted must show a positive net worth.
    • Sufficient collateral.
  • Any other information as required or requested by the EDA.
  • Applicant completes the application below, including providing necessary documentation.
  • The loan committee will review application and may request additional information, as needed.
  • Applicant will meet with Director of the Main Street Owatonna program to review plans if building is located in the Central Business District of Downtown Owatonna.
  • The loan committee will recommend to the EDA to approve or disapprove the application.
  • If approved, the loan recipient signs loan agreement.
  • Loan recipient starts project.
  • Once completed, the loan recipient submits paid invoices for reimbursement (within 180 days of approval).
  • The Owatonna City Council approves and disburses funds to loan recipient.
  • Loan recipient provides updates and information as requested by the EDA for duration of loan.
Funding Source:

Loan program is subject to the availability of EDA loan funds. Priority will be given in the order that completed applications are received.
Required Documentation for this Application:
  • Plans, diagrams, blueprints, quotes, and/or bids for your project.
  • For exterior projects, a current photo of the building’s exterior and a drawing of the proposed changes.
  • A personal financial statement (if needed, download a template here).
  • Most recent personal tax returns.
  • Bank letter of reference.
For questions about the program or other EDA loan programs, please contact:

Sean Williams
Executive Director
Owatonna Area Business Development Center
(507) 451-0517
To begin your application, click "Next" below.
20% of survey complete.