Small Business Environmental Improvement Loan Program
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Why a Small Business Environmental Improvement Loan Program?
Who is eligible for the loan programs?
What types of projects are eligible?
What are the conditions of the loan?
What are the evaluation criteria?
Additional financial resources for small businesses
Small Business Environmental Improvement Loan Program (p-f2-25)
The Minnesota Pollution Control Agency (MPCA) recognizes that environmental issues often have a significant financial impact on small businesses. For example, air quality rules for dry cleaners and metal platers create financial and regulatory concerns and site investigations and cleanups can also be very costly. A small business may also face expense in eliminating a toxic product or reducing a waste stream to protect workers, human health and the environment. All of these costs can create burdens that require assistance.
Why a Small Business Environmental Improvement Loan Program?
The MPCA offers the Small Business Environmental Improvement Loan Program as a means to help small businesses help themselves with environmental projects. Through the program, small businesses are able to achieve successes with their environmental projects and goals, while at the same time helping to preserve Minnesota's air, land, lakes and quality of life.
The program provides low-interest loans to small businesses to finance environmental projects such as capital equipment upgrades that meet or exceed environmental regulations, and costs associated with the investigation and cleanup of contaminated sites.
Businesses benefit in many ways from the projects possible with the loan program. Common benefits include reduced worker exposures, lower costs for waste disposal fees and reduced regulatory burdens. Businesses may also find that through pollution prevention efforts they may qualify for simpler environmental permits or licenses. Frequently, these benefits also have a positive impact on the business bottom line.
Who is eligible for the loan program?
Many different types of businesses are eligible to receive loans through the program. To qualify, a borrower must:
- be an existing small business corporation, sole proprietorship, partnership or association,
- have less than 50 full-time employees,
- have an after-tax profit of less than $500,000,
- have a net worth of less than $1,000,000,
- demonstrate an ability to repay the loan.
What types of projects are eligible?
Many different types of projects are eligible for loans through the program. To qualify, projects need to involve pre-approved capital equipment purchases that meet or exceed environmental rules and regulations, or pre-approved site investigations and cleanups. Please note — projects that were begun or completed prior to receiving approval from the MPCA through the application process are not eligible for the program.
What are the conditions of the loan?
The general terms are as follows:
- a loan amount not less than $1,000 or more than $50,000,
- an interest rate of four percent or one-half the prime rate, whichever is greater at the time the loan is awarded,
- a repayment term of not more than seven years for environmental improvements,
- collateral is required.
In addition, once the project is completed, borrowers are asked to complete an evaluation of the project's realized environmental and economic benefits. The MPCA uses this information as ongoing feedback to evaluate and enhance the program.
How do I apply for a loan?
To receive an application, contact the MPCA's Small Business Ombudsman.
Loans are awarded throughout the calendar year.
What are the evaluation criteria?
The criteria used to evaluate loan applications are the applicant's financial need and ability to secure and repay the loan, and the project's expected environmental benefits. The applicant is prompted to provide detailed information to address these criteria in the loan application. At times specific businesses and/or projects may be given special consideration by the MPCA. This is often done when the MPCA is targeting assistance to a specific industry sector in response to a new regulation. Please contact the MPCA's Small Business Ombudsman as provided below to learn more about current assistance efforts.
Who decides the awards?
A screening committee composed of financial and environmental professionals evaluates each application for financial need, ability to repay and expected environmental benefits. This committee makes the final determination on all loan awards.
Please note that funds for this program are limited. As a result, the committee awards loans on a competitive basis based on available funds and number of applications received. It typically takes a minimum of 45 days to complete the process once a loan is awarded.
Additional financial resources
In addition to the Minnesota Small Business Environmental Improvement Loan, other resources are available to assist small businesses and their efforts to succeed.
Minnesota Pollution Control Agency. The MPCA has various opportunities available for obtaining loans and other financial assistance for environmental projects in Minnesota. Areas include: cleanup, environmental assistance, and water-related financial assistance.
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MN Grants (Minnesota Office of Grants Management) 
This website provides a single entry point to state competitive grant opportunities in Minnesota: Search by state agency or by subject area. - Positively Minnesota This site offers many alternatives in acquiring capital for start-up, expanding or relocating in Minnesota. Coordinated by the Minnesota Department of Employment and Economic Development (DEED).
- US Small Business Administration (SBA). From learning the basics of financing to connecting with SBA partners, this helpful Web site provides financial resources to new and existing small businesses.
- US SBA - Minneapolis Office. This Web site for the Minnesota District Office of the SBA offers information on local SBA resource providers.
- Federal Agency Grant Opportunities. Grants.gov is the official Federal government Web site where applicants may Find and Apply to funding opportunities from all 26 Federal grant-making agencies.
Contact information
For more information, or to request an application, please contact the MPCA's Small Business Ombudsman as follows:
Mike Nelson
MPCA
520 Lafayette Road N.
St. Paul, MN 55155
651-757-2121
800-985-4247
michael.nelson@state.mn.us
