State, Federal and Other Incentive Programs
On behalf of your business, GREDA will aggressively pursue and assist in administering the many grants, loan programs, and other forms of business assistance obtainable through state, federal and non-profit agencies. GREDA Staff is available to confidentially discuss any of the following programs to assist you in determining if they match your business needs.
The IRRRB is a unique State of Minnesota economic development agency, located in Eveleth, Minnesota, with a mission is to advance regional growth by stabilizing and enhancing the economy of northeastern Minnesota's Taconite Assistance Area, which Grand Rapids is located within.
Their services include but are not limited to financial assistance in the following areas:
- Bank Participation Loans: IRRRB purchases a portion of a loan originating with a commercial bank or other regulated lender. A shared first position lien, with the bank or lender, on the financed assets and/or other assets is required. Generally, the maximum participation by IRRRB in any single project is limited to not more than $250,000. The interest rate on the purchased participation is set at a minimum rate of 3 percentage points less than the full-faith and credit obligations of the United States Government of comparable term to the loan, rounded up to the nearest one-half percent. The minimum rate charged on participation loans is 1 percent.
- Direct Loans: IRRRB loans its funds directly to the eligible business. Collateral requirements are negotiable, but typically IRRRB will require a first lien on the financed assets and/or other assets. The interest rate will be set at an interest rate one percentage point less than the full-faith and credit obligations of the United States Government of comparable term to the loan, rounded up to the nearest one-half percent. The minimum rate charged on direct loans is three percent.
- Loan Guaranties: IRRRB will consider a limited guaranty on a loan to an eligible business that is originated by a commercial bank and/or other lender. Terms and conditions of any guaranty will be negotiated between the lender and the agency.
- Equity Investment: IRRRB has statutory authority to invest its funds directly into eligible privately owned companies that exhibit extraordinary growth potential. The investment can be in the form of a direct stock purchase or in a convertible debenture. Terms and conditions are negotiable.
Economic Development Grants
- Public Works Grants: The GREDA and City have successfully accessed these IRRRB grants to fund the infrastructure needs of business development and housing projects including: water, sewer, utility extensions, site improvements, and streets. Other eligible projects may include shovel ready infrastructure upgrades, healthcare capital projects, and airport projects that support community and economic development.
- Community Redevelopment Grants: The City and GREDA have successfully accessed these IRRRB funds which are designated for the demolition and removal of commercial buildings or publicly-owned structures, or the cleanup of Brownfields sites to make way for new development. IRRRB typically limits grant awards to a maximum of $200,000 per applicant; however, grant awards at a higher amount have been awarded where circumstances warranted.
GREDA has established a successful relationship with DEED, the state’s principal economic development agency. DEED programs promote business recruitment, expansion, and retention; international trade; workforce development; and community development.
Their services include but are not limited to assistance in the following areas:
Business Development Funding
- Job Creation Fund: Provides financial incentives to new and expanding businesses that meet certain job creation and capital investment targets.
The program is available to businesses engaged in manufacturing, warehousing, distribution, technology-related industries, and other eligible activities. Companies must work with the local government (city, county or township) where a project is located to apply to DEED to receive designation as a Job Creation Fund business.
To be designated as a Job Creation Fund business, a business must, at minimum:
- Be engaged in an eligble business activity
- Obtain local government support for their project via council resolution
- Invest at least $500,000 in real property improvements within one year of becoming a designated Job Creation Fund business
- Create at least 10 new full-time permanent jobs within two years of becoming a designated Job Creation Fund business
- Pay at least $12.82 in wages and benefits adjusted annually based on 110% of fedral poverty guidelines
- Have other location options outside Minnesota
- Cause no undue harm to Minnesota business competitors
- Cretify that the project would not occur without Job Creation Fund assistance
- $1,000 per year per job created for jobs paying at least $26,774 in cash wages
- $2,000 per year per job created for jobs paying at least $36,041 in cash wages
- $3,000 per year per job created for jobs paying at least $46,339 in cash wages
- Up to a 7.5% rebate for real property improvements for business located in Greater Minnesota
- Greater Minnesota Public Infrastructure Grant Program: The Greater MN Business Development Infrastructure Grant Program helps stimulate new economic development, create new jobs and retains existing jobs through investments in public infrastructure. It provides grants to cities of up to 50 percent of the capital costs of the public infrastructure necessary to expand or retain jobs in the area, increase the tax base, or expand or create new economic development.
- Minnesota Investment Fund: Funds are provided to help add new workers and retain high-quality jobs on a statewide basis. The focus is on industrial, manufacturing, and technology-related industries to increase the local and state tax base and improve economic vitality statewide. Grants are awarded to local units of government who provide loans to assist expanding businesses. All projects must meet minimum criteria for private investment, number of jobs created or retained, and wages paid. There is a maximum of $500,000 per grant.
Community Development Funding
- Small Cities Development Program Grants (SCDP): are provided to cities to assist with funding for housing, infrastructure and commercial rehabilitation projects that benefit people of low and moderate incomes. Projects must meet one of three objectives:
- Benefit people of low and moderate incomes
- Eliminate slum and blight conditions
- Eliminate an urgent threat to public health or safety
The maximum grant award for a Single Purpose project is $600,000. The maximum grant award for a Comprehensive project is $1.4 million.
Site Cleanup and Redevelopment Funding
- Contamination Cleanup and Investigation Grant Program: are provided to communities to assist in the cost of assessing and cleaning up contaminated sites for private or public redevelopment. Grants pay up to 75 percent of the costs to investigate and clean up polluted sites. Both publicly and privately owned sites with known or suspected soil or groundwater contamination qualify.
- Redevelopment Grant Program: The Redevelopment Grant Program helps communities with the costs of redeveloping blighted industrial, residential, or commercial sites and putting land back into productive use. Grants pay up to half of redevelopment costs for a qualifying site. Grants can pay for land acquisition, demolition, infrastructure improvements, soil stabilization when infill is required, ponding or other environmental infrastructure and adaptive reuse of buildings, including remedial activities at sites where a subsequent redevelopment will occur.
- Minnesota Job Skills Partnership Program: DEED provides training grants of up to $400,000 to educational institutions that partner with businesses to develop new-job training or retraining for existing employees. Training projects pair at least one public or private accredited Minnesota educational institution and one business.
Public Works and Economic Development Grant Program: The City of Grand Rapids and GREDA have a track record of success in accessing federal assistance, through this program, for both infrastructure extensions serving projects involving business expansion/creation, the construction or renovation of building facilities, land acquisition and other eligible activities.
Foundations and Non-Profit Organizations
- Northland Foundation Business Finance Program: The Northland Foundation, a regional foundation serving the communities of northeastern Minnesota, provides assistance to small and medium-size businesses in the form of business loans, working capital lines of credit, loan guarantees, and royalty investments.
- Arrowhead Regional Development Commission (ARDC) Revolving Loan Fund: ARDC offers a business loan program providing below market rate loans of up to $250,000 to for-profit owner operated businesses engaged in manufacturing, valued added products, tourism, the office sector and technological innovative industries.
- Entrepreneur Fund Business Loans: The Northeast Entrepreneur Fund assists those considering the start-up or expansion of small business with planning and financing through its own loan fund. Loan amounts of up to $500,000 can be used to purchase equipment and inventory and to provide working capital.