The funds are oats to PEDC which, in turn, makes loans to eligible small businesses. Prairieland's IRP is designed to provide job opportunities for rural families, displaced farm families, and low or moderate income persons. Eligible IRP uses include business acquisition, construction, conversion, enlargement, repair, modernization, development costs, purchase and development of land, building, facilities leases or materials, equipment, leasehold improvements, machinery, supplies, pollution control and abatement, transportation services, startup costs and operating capital, interest during startup period, feasibility studies, certain reasonable fees and charges, and aqua culture. Applicants must show that other sources of financing were sought and that the project can't be financed, either in whole or in part, with traditional lending sources. The project costs must be documented through appraisals or other recognized, standard techniques for the type of asset being financed.
Adequate collateral is required.
Life insurance on key persons and personal guaranties by principals are required. Prairieland also administers the SBA 504 Loan Program to assist communities to create jobs and expand the local tax base by stimulating small business investment in plant and equipment. This program traditionally lends to healthy, existing, expanding businesses manufacturing, retail or service. Funds may also be used for infrastructure improvements necessary to support businesses located or intending to locate in Minnesota. Requests for working capital loans, retail development or the development of new industrial parks will not receive priority consideration.