Emerging Entrepreneur Loan Program Application

The Minnesota Emerging Entrepreneur Loan Program provides loan capital for businesses that are owned and operated by BIPOC (Black, Indigenous, Persons of Color), low-income persons, women, veterans, and/or persons with disabilities. The program has additional goals of providing jobs for BIPOC and/or low-income persons, creating and strengthening BIPOC business enterprises, and promoting economic development in low-income areas.

EELP loans can be issued to “micro-enterprise” businesses in southeast Minnesota owned by BIPOC or low-income persons, women, veterans, or persons with disabilities for a minimum of $5,000 and a maximum of $50,000. Micro-enterprises are small, beginning businesses that have fewer than five total employees and have been generating revenue for less than two years. For older and/or larger businesses, loans are available up to $100,000, and require 1:1 matching funds.

Businesses eligible for loans include, but are not limited to, technologically innovative industries, value-added manufacturing, and information industries. Retail businesses are only eligible if they are micro-enterprises.

Structures: traditional financing with interest rate of 11.75% (as of 2/24/23) or profit-based financing (borrower prohibitions on interest, e.g. Sharia law).

Origination Fee: 1%

Term: 3 - 5 years, depending on the project

An information session was held on 12/16/21 - watch a recording of it here.

Guidelines for the EELP are available in Somali, Arabic, Khmer, Spanish, and Vietnamese.

Need help putting together a business plan? Get confidential help for free from the Small Business Development Center!

This program is funded by the State of Minnesota and the Minnesota Department of Employment and Economic Development.

In order to qualify for a loan under the Minnesota Emerging Entrepreneur Loan Program (EELP) under RAEDI, businesses must be based in southeast Minnesota (Twin Cities businesses are not eligible), and majority-owned and operated by one or more Minnesota residents who are BIPOC, low-income persons, women, veterans, and/or persons with disabilities. If you are located outside of southeast Minnesota, you can find an ELP lender for your area here.

The loan can finance a variety of startup and expansion costs, including normal expenses such as machinery and equipment, inventory and receivables, working capital, new construction, renovation, and site acquisition. Financing of existing debt is not permitted.

Other Conditions:

• Please submit only one application per business. An eligible business may receive at most one loan under this program, which can cover multiple projects.
• A business owner may not receive loans for multiple businesses for which they have an ownership share of 20% or more.

To complete your application, you will need:

• Business Plan
• Financial Projections for three years (template available here, if needed)
• Copy of Business Tax Returns for last three years, as available
• Copy of Personal Tax Returns for last three years of owners – both Federal and State
• Year-to-Date Income and Expense Statement, and Balance Sheet (for existing businesses)
• Personal Financial Statements for all owners who own 25% or more of the company (template available here)
• Proof of Identity (submit ONE of the following):
  • Copy of driver’s license or state identification card (color copy preferable)
  • Copy of passport
• Proof of Minnesota Residency of a majority owner of the company (submit ONE of the following):
  • Copy of valid (non-expired/voided) Minnesota driver’s license or state identification card (color copy preferable)
  • Copy of personal Minnesota income tax return
  • Copy of current residential lease agreement or recent personal mortgage statement (on or after January 1st, 2022)
  • Copy of recent residential utility bill in owner's name (on or after January 1st, 2022), OR
  • Copy of DD-214 from Department of Defense showing Minnesota address.
• NOTE: A valid (non-expired/voided) Minnesota driver's license or identification card will cover both of these last two requirements.

Potential additional required documents (if applicable):

• Form DD-214 showing Honorable Discharge from Military Service
• Documentation evidencing disability status
• Copy of Personal Tax Return of Owners (2020 or 2021, if available, to determine low-income eligibility)

IMPORTANT NOTE: All documentation MUST include company name in the name of the file, e.g. SamsBakery-BusinessPlan.pdf

NOTE: A personal credit check will be run as part of the application process for informational purposes, but will NOT be used to determine eligibility for a loan.

NOTE: All applicants will be interviewed by RAEDI staff to determine eligibility (translators are welcome to participate, if needed).

Additional Ineligible Businesses:

• Business located outside of the 11-county southeast Minnesota region.
• Sole proprietorships (single-member LLCs and corporations are eligible).
• Liquor stores or establishments primarily selling liquor made off-site.
• Stores primarily selling tobacco or electronic smoking products, gambling operations, or adult oriented businesses.
• A 501(c)(3), 501(c)(6), or other non-profit business.
• A business deriving income from passive investments without operational ties to operating businesses.
• A business primarily focusing on speculative activities based on fluctuations in price rather than the normal course of trade.
• A business earning more than half of its annual net revenue from lending.
• A business engaging in pyramid sales, where a participant's primary incentive is based on the sales of an ever-increasing number of participants.
• A business engaging in activities prohibited by federal law or applicable law in the local jurisdiction of the business.
• A business owned in-whole or in-part by RAEDI employees or their immediate family members.

Additional Resources:

Small Business Development Center. If you need free, confidential help with your business plan or financial projections, contact the SBDC. 

Targeted Group / Economically Disadvantaged / Veteran-Owned (TG/ED/VO) Small Business Procurement Program. This procurement program is available through the Materials Management Division of the Minnesota Department of Administration. Details of the program can be found here with additional details in Minnesota Rules, Chapter 1230.

MinnesotaWorks.net. Businesses or private enterprises seeking to hire for positions in Minnesota may list any vacant or new positions with MinnesotaWorks.net. The employer may also enlist the services of the Workforce Center Business Services staff to recruit and refer job candidates.

Work Opportunity Tax Credit. The Work Opportunity Tax Credit is a federal tax credit available to all private sector businesses as an incentive to employers to hire workers in certain groups who consistently experience high rates of unemployment. Details can be found here.

Public Data
If the project is approved, the information contained in the application will become a matter of public record with the exception of those items protected under the Minnesota Government Data Practices Act found in Minnesota Statutes, Chapter 13.

If you have all the necessary documentation, this application should take less than 30 minutes to complete. Please complete the application below to apply.

Have a question? You can reach our Director of Entrepreneurial Services, Sean Williams, via email at swilliams@raedi.com or by phone at (507) 288-0208. You can also book a virtual meeting with him during our Open Office Hours by clicking here.