Governmental Finance Programs

A. Governmental Finance Programs

A wide variety of special financing programs are available to qualifying businesses. The majority of the programs concentrate on providing assistance to industrial types of firms but there are exceptions. The following brief description can be used as a guide to the various governmental financing programs.

1. Local Programs

a. City Revolving Loan Fund

Through the Fairmont Economic Development Authority (FEDA), reduced interest rate loans are available on a matching basis for business expansion projects. The loans are normally subordinated and the criteria is adaptable but is normally 25% of the project cost. Other requirements include that it also must be less than $10,000 for each job. The interest rate and term are negotiable within a general range. For further information please contact:

Michael Humpal, CEcD

Assistant City Administrator

Fairmont Economic Development Authority

P.O. Box 751

100 Downtown Plaza

Fairmont, MN 56031

507-238-9461

b. County Revolving Loan Fund

Through the Martin County Area Economic Development, Inc. (McAEDI), reduced interest rate loans are available on a matching basis for expansion projects. The loans are normally subordinated and the criteria is adaptable but is normally 25% of the project cost. Other requirements include that it also must be less than $10,000 for each new job created. The interest rate and term are negotiable within a general range. For further information please contact:

Martin County Area Economic Development, Inc.

201 Lake Avenue

Fairmont, MN 56031

507-238-3256

c. Tax Increment Financing

Tax increment financing (TIF) programs are available for those businesses where physical expansion will result in a significant increase in normal property taxes. The program is tightly regulated by the State. For further information please contact:

Michael Humpal, CEcD

Assistant City Administrator

Fairmont Economic Development Authority

P.O. Box 751

100 Downtown Plaza

Fairmont, MN 56031

507-238-9461

d. Fairmont Business Development Center

The Fairmont Economic Development Authority (FEDA) has acquired an industrial building for use as an industrial incubator. The Fairmont Business Development Center is still in development stages but will feature common support services, common use areas and rental space at phased costs that begin below market rate. Over 12,000 square feet of space is available with loading docks, exterior truck access, concrete parking area and other related amenities. For further information please contact:

Michael Humpal, CEcD

Assistant City Administrator

Fairmont Economic Development Authority

P.O. Box 751

100 Downtown Plaza

Fairmont, MN 56031

507-238-9461

e. Compensating Balance Programs

In an effort to reduce the costs of industrial expansion, a Compensating Balance program has been established between SMMPA and Fairmont. Under this program, SMMPA is willing to purchase a Bank Certificate of Deposit from an industrial lenders bank in an amount equal to the loan being provided. The CD carries an interest rate 2% below the normal rate. The bank agrees to provide the loan at 2 1/2% below the normal loan rate. For information, please contact:

Michael Humpal, CEcD

Assistant City Administrator

Fairmont Economic Development Authority

P.O. Box 751

100 Downtown Plaza

Fairmont, MN 56031

507-238-9461

f. Equity Investors

The Fairmont area has a large number of successful individuals and/or companies that regularly consider equity investment opportunities. The diversity and variation in the types of firms within the community makes it possible to evaluate any size of equity investment opportunity that may be proposed. For information about potential equity investment, please contact:

Michael Humpal, CEcD

Assistant City Administrator

Fairmont Economic Development Authority

P.O. Box 751

100 Downtown Plaza

Fairmont, MN 56031

507-238-9461

2. Regional

a. Region 9 Revolving Loan Fund

The Regional Development Commission for this area operates a revolving loan program specializing in assisting industrial types of projects. For further information, please contact:

Mr. Wes Judkins

Region 9 Development Commission

410 South 5th Street

Mankato, MN 56001

507-387-5643

b. Southeastern Minnesota Initiative Fund (SEMIF)

The Initiative Fund for this area operates a revolving loan fund that can assist a variety of project types. For further information, please contact:

Ms. Trixie Ann Golberg

Executive Director

Southeastern Minnesota Initiative Fund

P.O. Box 570

Owatonna, MN 55060

507-455-3215

3. State Programs

a. Small Cities Program

The State of Minnesota through the Department of Trade and Economic Development (DTED) provides a matching business loan program that provides a grant to governmental units that is then lent to private business enterprises. Application is made through the individual cities or counties. For further information, contact the appropriate local governmental agency or DTED directly.

Department of Trade & Economic Development

121 East 7th Place

500 Metro Square

St. Paul, MN 55101-1421

612-297-1844

800-657-3858