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| Home > Businesses |
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| Technology Business Loans |
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Our Technology Capital Fund is designed to help central Minnesota entrepreneurs launch emerging technology ventures and help established companies integrate proven productivity applications into their business operations and processes. Recognizing that conventional and alternative lending practices may not be flexible enough for technology-based businesses, the Initiative Foundation may choose to waive certain collateral requirements.
For business start-up and expansion projects, Initiative Foundation business financing programs meet the “gap” between the financing a local lender is able to provide and the equity the owner is able to contribute. Financial participation by a local lender is required.
Investment Amount: $50,000 to $500,000
Eligible Investments
- Operating capital
- Fixed assets, land and buildings
- Construction or leasehold improvements to accommodate high technology operations
- Machinery and equipment for high-volume productivity or high-margin applications
- Commercialization of new product launch and marketing
- Productivity and process-enhancing software systems
Collateral and Credit Worthiness
- Owner commitment (equity), credit worthiness and capacity for repayment must be well-established.
- Personal guaranties from principal owners are required and negotiable.
- Investments may require credit enhancement, including federal guaranties, subordinate debt or other collateral. Collateral positions may be subordinate to other lenders in financing packages.
Terms and Fees
- Repayment terms are based on the type of assets financed, collateral valuation, risk-opportunity rating analysis and other due diligence.
- Investments may have convertible options exercised by the Initiative Foundation as direct loans, royalty or equity positions.
- The Initiative Foundation may charge up to 2% in origination fees, one-half of which is considered a nonrefundable loan application fee. The borrower is also responsible for any legal fees associated with documenting and closing the investment.
Borrower Requirements
- Demonstrated management skills, industry experience and financial aptitude
- A sound business plan with financial projections
- Due diligence in product and technology validation
- Outside assessment of business and marketing plan (if deemed necessary)
- Creation of living wage jobs with broad employee benefits
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