SECTION HIGHLIGHTS
Serving the Iron Range and northeastern Minnesota
Leverage Business Capital in northeastern Minnesota
During these times of economic contraction, it is becoming increasingly difficult for businesses to raise capital for new ventures, expansion or relocation. Northeastern Minnesota is fortunate to offer an extraordinary array of financial resources, particularly for a rural area. Iron Range Resources, a State agency funded by taconite production taxes, is the region’s leading economic development agency. Iron Range Resources provides vital funding, including low or no interest loans, grants and loan guarantees for businesses relocating or expanding in the region.
Types of Financial Assistance Available
Iron Range Resources financing can be structured to best suit your needs. The agency is limited by law to a maximum of 50 percent participation in eligible financed costs.
Bank Participation Loans: Iron Range Resources 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 Iron Range Resources in any single project is limited to not more than $250,000. However, the interest rate on the agency's purchased participation will be set at a minimum interest rate 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. The interest rate is determined at the time the participation loan is approved by Iron Range Resources. (The interest rate on the bank portion of the loan is a matter to be negotiated between the business and the bank.)
Direct Loans: Iron Range Resources loans funds directly to the eligible business. Collateral requirements are negotiable, but typically the agency 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. The interest rate is determined at the time the loan is approved by Iron Range Resources.
Loan Guaranties: Iron Range Resources 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: Iron Range Resources 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.
Click here to view the Financial and Technical Resource Guide. Iron Range Resources collaborates with an extensive business resource network to provide a wide range of incentives for sound, sustaining business development.
Contact our Business Development Division for more information at 1-800-765-5043, 218-735-3000 or E-mail: developmentstrategies@ironrangeresources.org