Emerging Entrepreneur Loan Program

Applications are available now on the RAEDI site.

No. Due to the large volume of applications, we can only accept applications submitted through the online form.

Yes, we received your application. When you fill out the application and click submit, you will receive a default notification from the software we are using to collect application information with this message. This means we’ve received your application. Unfortunately, we’re not able to provide an email confirmation or reference number, so please print this page for your records.

Yes, you should be able to continue your application from where you left off, as long as you’re using the same computer and browser. If it didn’t save, you are welcome to start again, complete a new application, and submit it.

No, you will be unable to edit your application once it’s submitted. You can submit another application, however, and your previous application will be disregarded; the last application you submit will be the one considered for loan consideration.

Yes, although you may want to complete each application in a new Private Window or a new browser, to prevent cookies used in the application program from overwriting previously submitted applications.

If you’re not sure if you uploaded the correct document, you can go back to your application before submitting and upload a new one. Due to the high number of applications, we cannot check it on our end for you once it is submitted. You can submit another application, however, and your previous application will be disregarded; the last application you submit will be the one considered for loan consideration.

No. However we can only accept the last application you submitted. Any applications you submitted prior to the last one you submitted will be disregarded. Please do your best to avoid submitting more than one application for the same business.

There is no cutoff for applying for the Emerging Entrepreneur Loan Program, but applications are processed on a first-come, first-served basis.

The Small Business Development Center is available to provide professional expertise and guidance. Learn more here, or you can sign up directly here: https://mnsbdc.ecenterdirect.com/signup They will provide confidential application assistance free of charge. You may use any other assistance provider you wish, but no assistance provider, whether free or fee-based, can guarantee you will receive a loan.

Yes, you should apply. Personal credit histories are pulled for informational purposes, but are not considered as part of the eligibility process.

Your business plan needs to be long enough to communicate how your company will be successful, so that the finance committee can accurately evaluate it. If you need help with your business plan, contact the SBDC.

Make sure to include your company name in the name of the file, e.g. SamsBakery-ScheduleC.pdf.

Rochester Area Economic Development, Inc. (RAEDI) administers the EELP for southeast Minnesota for DEED. RAEDI’s finance committee will evaluate applications, and make recommendations to the RAEDI Board. The Board then advances the applications to the Minnesota Department of Employment and Economic Development, which makes the final approval.

We will contact applicants about the status of their loan application on a rolling basis, as they are received.

Once your application have been approved by DEED, your loan will be awarded by RAEDI via check, sent to your mailing address as indicated on the application.

We will notify all applicants who provided an email address about the status of their application. However, due to the large volume of applications, we may not be able to respond to requests quickly.

After you have been selected for an award, you may be asked by RAEDI for documentation that verifies you are eligible to receive a loan. Some examples of documentation you may be asked to provide include – but are not limited to – the following: sales tax reporting, period statements from third-party sales platforms, merchant services statements, point of sale or register reports, third-party payroll processor reports, federal form 941/employer’s quarterly federal tax return, or other state or federal payroll-related filings.

By completing the application, you are certifying that you are eligible to receive this grant and that the grant will be used for eligible uses only. Therefore, loans may potentially be made without additional contracts or certifications, but are subject to change, based on DEED’s requirements.

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.

Yes

Yes

Yes

No

Yes. This is a loan that you will be required to pay back.

Please consult your accountant, lawyer, or other tax advisor. RAEDI is unable to provide tax advice.

Please refer to Unemployment Insurance rules and procedures for how to report a loan as income when you request your weekly benefit.

The following businesses would not be eligible:

• Business located outside of the 11-county southeast Minnesota region.
• 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.

Not necessarily, although a goal of the program is to retain and increase jobs in southeast Minnesota.

This is to be determined. While RAEDI received an initial allocation of funding from DEED, we expect to be able to increase the funding pool once the initial amount has been issued.

Yes

Please refer this question to your PPP loan servicer or financial advisor.

Yes

No. The EELP is a program funded by the State of Minnesota, and MSR grants require the match come from non-state funding sources. Please consult your MSR administrator for more info.

You can send your questions to swilliams@raedi.com. We will be reading all questions that come in and updating the FAQ as quickly as possible. Due to the large volume of inquiries, we may not be able to respond individually to each question in a timely manner.

If accepted, your loan will have the interest rate at the time of application, not the rate at the time it’s approved.

No, nonprofits are not eligible for the EELP.

If cooperatives are structured to generate and distribute profits for the benefit of members or owners, they are eligible for this program.

If the ESOPs are structured to generate and distribute profits for the benefit of employees, they are eligible for this program.

No. The majority ownership of a business must be owned by one or more permanent residents of Minnesota.

For the purposes of this program, “permanent resident of Minnesota” means “resident” as defined by Minnesota Statutes (Minn. Stat. 290.01). The term “resident” means any individual who is domiciled in Minnesota or is domiciled outside the state who maintains a place of abode in the state and spends, in the aggregate, more than one-half of the tax year in Minnesota, unless the individual or the spouse of the individual is in the armed forces of the United States.

The term “abode” means a dwelling maintained by an individual, whether or not owned by the individual and whether or not occupied by the individual, and includes a dwelling place owned or leased by the individual’s spouse.

No. Businesses are required to be located in southeast Minnesota.

Possibly. You can only apply for one loan if you own more than 20% of another business.

Not necessarily. If your business operates under your own name and not an assumed name or an LLC, S corporation, or other business formation, you do not need to be registered with the Secretary of State. Sole proprietorships are not eligible for funding, however.

No. This program is limited to private for-profit businesses.

Low-income person means a person whose income is less than or equal to 80% of median income for their county of residence adjusted for family size. Median income for southeast Minnesota counties can be found here.

No. You can only receive one loan per business.

Yes, as long as you own less than 20% of the other businesses.

No

Yes. Home-based businesses are eligible for this program.

According to IRS Publication 587 a home-based business is one that uses the owner’s home (or space within the home) as its principal place of business. That is:

1. It is used regularly and exclusively for administration or management of a trade or business, and
2. The owner has no other fixed location where the business carries on a substantial amount of administration or management.

Yes, as long as your business meets all other eligibility criteria.

Yes

Yes

Not necessarily. Businesses with more than 50 employees are required to provide 1:1 matching dollars with the loan amount.

No

Yes. If you are selected to receive a loan, you may be asked for information that verifies your farm is operated for profit and is not a so-called “hobby farm.”

This program is processing applications on a first-come, first-served basis. In the event that demand outweighs funding available, being eligible in multiple categories may affect prioritization by the finance committee.

No. If you disclose that your business may qualify under those categories, you may be required to provide additional information confirming the status of your business before receiving an award. Any official certification you received can be used as documentation, but it is not required to have this certification.

Yes. In order to apply for a loan under these categories, potential additional required documents would be (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)

No. However, if you are a minority-, veteran-, or woman-owned business, and you want your business to be considered for a loan, you will need to indicate that on your application.

No

Veterans must meet the definition of a veteran as stated in Minnesota Statute 197.447 that states a Veteran is:

• A citizen of the United States or a resident alien
• Separated under honorable conditions from any branch of the armed forces of the United States
• Served on active duty for 181 consecutive days or by reason of disability incurred while serving on active duty, OR:
  • Met the minimum active duty requirement as defined by Code of Federal Regulations, title 38, section 3.12a, OR
  • Has active military service certified under section 401, Public Law 95-202 certified by the United States secretary of defense as active military service and a discharge under honorable conditions must be issued by the secretary.

For more information, visit the MDVA website.