HEDA Business Loan
Areas of Emphasis
In an attempt to further diversity the economic base of Hibbing, primary emphasis will be placed on projects which include job creation and promote manufacturing or further develop technologically innovative businesses, minerals, forestry and wood products, small business, retail, and tourism. The focus of the program will be to assist those businesses and industries that have a primary economic impact. Furthermore, this program is designed to increase, expand and diversify the area's economic base by creating new private investment in the City, as opposed to further subdividing the existing economic base.
Geographic Area of Program
To be eligible for assistance under this program your business must be located within the City of Hibbing.
The emphasis of this program is on providing assistance to "leaders" of the economy. With this in mind, the following types of businesses have been determined to be eligible for assistance under the program:
- Tourism projects which attract tourism expenditures from outside the region; and
- Technologically innovative industries
- Businesses having a significant impact on the community
The business to be assisted must be a for-profit operation, but may be a new start-up or existing business, and may be organized as a proprietorship, partnership, or corporation.
The following types of businesses would normally be ineligible for assistance under the program.
- Professional offices
- Speculative real estate
- Casino and sports facility
The concept of this program is to participate in the financing of eligible project costs by purchasing a portion of a bank loan. The HEDA loans are limited to a maximum of 50% participation of financed eligible project cost. Total project cost may include certain items that are ineligible for HEDA financial assistance, thereby increasing the bank's portion beyond that of the HEDA. The HEDA rate of interest on a loan shall be equal to the banks interest rate. The interest rate may be reduced by ½% by the HEDA lender if the borrower achieves and maintains certain employment thresholds for each six (6 FTE) employment positions created, filled and maintained.
The normal participation by the HEDA in any single project shall be limited to not more than $50,000
Eligible Use of Proceeds
Note: Debt refinancing and acquisition of an existing business are an ineligible use of proceeds.
- Land and building acquisition
- Land improvements
- New building construction
- Building renovation
- Machinery purchase/equipment
- Inventory purchase
- Demonstrated repayment ability
- Equity commitment
- Adequate collateral coverage
- Management capability
- Credit worthiness of applicant
- Marketing plan
- Leveraging of other funding sources
- Job creation/retention
- Economic impact on area
- Innovative technology
- Availability of funds
After review of the following guidelines for the HEDA Loan Program, please fill out the application and return it to our office. After the Economic Development Division has reviewed your application and deemed it to be an eligible business, a HEDA Executive Committee interview will be scheduled approximately one week prior to the regular monthly HEDA meeting. At any time during this process, staff will be available to answer any questions.
Listed below are items, which are often overlooked by some of our applicants:
- An eligible tourism project would generally consist of a project that would attract tourism as the end result.
- HEDA loan proceeds cannot be used for debt refinancing or acquisition of an existing business.
- The HEDA Board review and action usually takes place monthly. Please contact our division for information concerning the current funding cycle.
In addition to these points, if your project involves construction, the HEDA will participate in permanent term financing only. Interim construction lending must be financed via another lender.
- Read and thoroughly understand program guidelines
- Prepare the application and obtain bank signature
- Submit application to:
Hibbing Economic Development Authority
401 East 21st Street
Hibbing, MN 55746
- A HEDA representative will discuss with the business and participating bank the full details of this application.
- A HEDA Loan application should be completed and submitted to the Economic Development Office.
- The Economic Development staff, within 7 working days, will determine if a HEDA Executive Committee interview is appropriate and staff will contact the bank and the business.
- Contact the Economic Development Division for information concerning funding cycles.
- HEDA Executive Committee Review and recommendation.
- HEDA Board Review and action
- Disbursement process as per HEDA Policy
At any point in the application process, the application may be denied or sent back for further information.