Loan Applications

We’re passionately committed to unleashing the full, dynamic potential of west central Minnesota by investing in its economic development.

Download Our Loan Program Flyer

Gap Lending

We’re considered a gap lender, meaning we typically fund between 10% and 40% of the total financing need for qualified applicants. Our loan program supplements or complements conventional or bank financing. We don’t compete with local banks, but our funds help the financing package succeed for the prospective business or the existing business to expand. In some cases, primarily with smaller projects, we can serve as the lead lender if accessing bank financing has been difficult.

Loan Options and Guidelines

We offer several types of loans to businesses and potential businesses in our region. Before you submit a loan application, please contact Greg Wagner.

  •  Small Enterprise Loans

    The Small Enterprise Loan Fund provides loans from $1,000 to $50,000 and includes smaller loans to businesses in the manufacturing or service sectors. A small number of loans are made to retail businesses that don’t compete with others in their immediate trade area. Download the Application. Contact Greg Wagner to request the application in a different form.

  • Business and Industry Loans

    The Business and Industry Loan Fund is used for loans from $20,000 to $300,000. We receive funds from several different sources for this loan program, and they all have different qualifying criteria for projects. Historically, we offered these loans to the manufacturing industry, but we’ve expanded the eligibility to include other businesses. Download the Application. Contact Greg Wagner to request the application in a different form.

     

  • Access to Capital Loans

    Through our Access to Capital Loan program, we’ll match bank loan amounts up to $75,000. We offer a low-interest fixed rate, 5-year balloon, amortization to match the bank. Also, 100% LTV subordinated financing is available. Contact Greg Wagner for more information.

  • Child Care Loans

    We offer loans of up to $3,500 for home-based providers. Center-based providers may be eligible for additional funds. Recipients must use the fund to open or retain child care slots in our region. Most loans are related to improvements for property to be licensed or expand licensed space. Contact Greg Wagner for more information.

  • The Good Food Loan Fund

    This loan fund provides lower-interest loans (up to $15,000) to support new and existing small-scale farmers in our region. We encourage underserved segments of the farming population who do not have the availability of traditional financing to apply. Download the Application.

    • Borrowers should demonstrate a current and future commitment to farming.
    • Loan funds can be used for inventory, supplies, working capital, and equipment/machinery.
    • Loans cannot be used for conventional agriculture or real estate.
    • This fund offers a 3.5% interest rate and no loan origination fee.

    Contact Kate Mudge for more information.

  • Loan Guidelines

    Guidelines for All Loan Programs

    • We typically require a business plan.
    • Applicants must demonstrate that a financing gap exists and that the bank is unable to fund the entire project.
    • We always require a personal guarantee.
    • The project must demonstrate sound management ability and the likelihood of success must be very high.
    • We typically require an assignment of life insurance from the principal borrower.
    • Applicant must have a satisfactory credit history.
    • Applicants must provide cash flow projections and collateral values that demonstrate the repayment ability of the business.

    Projects Not Eligible for Our Loan Programs

    Although we do our best to accommodate applicants, we typically can’t finance certain types of loans, including loans for:

    • Projects with no equity investments.
    •  Applicants with poor credit histories.
    • Businesses that are unduly speculative or lacking a business plan.
    • Businesses brought into or relocated within our region without creation of new jobs.
    • Businesses that are unduly competitive with businesses in the same trade area.
    • Governmental entities.
    • Consumer loans.
    • Real estate development (speculative development).
    • Refinance existing debt.

Frequently Asked Questions

  • Where do I get a grant to start a business?

    Grants are funds that you do not need to pay back. Legally, West Central Initiative cannot make a grant to a for-profit business without jeopardizing our own non-profit charitable foundation status. We do have loan programs for both startup and expanding businesses.

  • Why do I need to have a bank lend me money if West Central Initiative has loan funds available with a lower interest rate?

    Our role is typically that of a “gap” lender, and our loan funds are intended to be only one part of a plan to help a business grow. Our loan programs are like stepping stones to help a business get to the next level in their business growth. For the long-term viability and growth of a business, a relationship with a commercial lender is very important. We like to see our loan recipients outgrow their need for “gap” financing because that means they are a financially stable company.

  • I plan to incorporate my business, so why is the lender asking for my personal guarantee on my business loan?

    A personal guarantee is your promise that the loan will be repaid, even if the business fails. Until a business becomes established and has grown to a point that total assets exceed all loans by a healthy margin, lenders will require personal guarantees from the owners of the business. They may even ask to take a second mortgage on your home, or secure your personal guarantee with some other type of collateral. This is a method of reducing the lender’s risk of making the loan to you and your business. Owners of some very large businesses, with annual sales in the millions of dollars, are still asked to personally guarantee the company’s business loans.

Inquire About a Loan

Interested in a loan? The first step is completing the brief form below describing your business and/or idea. After we receive your information, a member of our lending team will contact you.

Recent Economic News

Connect with Us

Greg Wagner
Greg Wagner, AICP
Director of Business & Economic Development
greg@wcif.org
218-998-1621 | 218-739-2239
Kate Mudge is outside on a sunny day standing in front of a green tree. She is smiling.
Kate Mudge
Business Development Officer
kate@wcif.org
218-998-1622 | 218-739-2239
Phil is standing outside on a winter day. He is wearing a neutral color sweater and has his arms crossed in front of his chest. Phil is wearing glasses, has a beard, and is smiling.
Phil Hintz
Loan Officer
phil@wcif.org
218-998-1635 | 218-739-2239