SBA 7(a) Program Shutdown Looming

Empty Pockets

It appears, given the current rate of SBA 7(a) loan approvals, the SBA 7(a) program may be shutting down soon for the remainder of the fiscal year. Realistically, once the program is up and running again, there will be quite a backlog of SBA 7(a) applications.

Let MBFC Help!

Timing is everything. NOW is the time to utilize MBFC and the SBA 504 Loan Program for your fixed asset financing needs. Let your borrowers take advantage of the long term, fixed rates the SBA 504 Program has to offer! The SBA 504 rate environment is attractive with the current 20 yr. effective rate at 4.96% and the 10 yr. effective rate at 4.33%. Turnaround time is great, with SBA typically approving our applications in 4-5 business days.

Give one of our Business Development Officer’s a call today!



Coming Soon, 2015 SBA Minnesota Lenders’ Conference!


The 2015 Minnesota Lenders’ Conference will be held on Thursday, September 3rd from 8:00-5:30 p.m. at the Marriott Minneapolis Northwest in Brooklyn Park.

Small business loans financed through the SBA provide needed access to capital for start-up and existing small business owners across Minnesota.  Today more and more small businesses need capital to support their growth and create jobs. The SBA loan programs should be a key part of every lender’s strategy.  They are a proven tool for attracting new customers with competitive loans for business expansion and working capital needs.

Take this opportunity to learn how to maximize your organization’s participation in SBA’s lending programs and build your network of SBA program and industry experts.

For more information on the event or to register click: 2015 SBA MN LENDERS CONFERENCE


MBFC’s nomination wins SBA Award!

MBFC’s Nomination Wins SBA Award!

The U.S. Small Business Administration, Minnesota Small Business Development Centers and the SCORE Association presented the 2015 52nd Annual Small Business Awards on Thursday May 7th as part of the National Small Business Week.

Michelle Mueller, Vice President of Minnesota Business Finance Corporation (MBFC) nominated Aggressive Hydraulics, Inc.of East Bethel, MN and they were selected as a Small Business Excellence Award recipient. Criteria for this award is response to adversity, service to their community, growth, longevity and innovation of products and services.

Aggressive Hydraulic was founded 13 years ago by seven skilled industry individuals who believed they could deliver a product that could compete with overseas factories. They engineer, manufacture and repair mobile hydraulic cylinders for heavy equipment in the construction, forestry/logging, mining and energy industries.

The business started with a 14,000 square foot building in Blaine, MN and had expanded into 2 additional buildings. However, efficiency was becoming an issue. The owners took time to design a new state of the art 60,000 square foot facility.

MBFC collaborated with Roger Hamilton from BankCherokee and the Metropolitan Consortium of Community Developers (MCCD), and the City of East Bethel to assist Paul Johnson and his partners on the financing for the new 60,000 square foot facility. Construction started in 2012 and the company took occupancy in 2013.

They have 54 employees at their facility in East Bethel and have added employees every year since 2009.

Aggressive Hydraulic’s creative approach to growth and doing right by their employees and customers has resulted in their sales doubling over the past five years.
Aggressive Hydr #1

(Pictured: Michelle Mueller, Vice President, MBFC, Dave Johnson, Asst. Repair Service Manager, Aggressive Hydraulics, Wes Maack, Controller, Aggressive Hydraulics, Roger Hamilton, Senior Vice President, BankCherokee, and Paul Johnson, President of Aggressive Hydraulics)

Grow Your Business with High-Leverage Long-Term Fixed Asset Financing with the SBA 504 Loan Program

Guest Feature by Joe Kammermeier, Vice President-MBFC

DSCN1270.2 webpage

As a business owner you generate a higher rate of return by investing your precious working capital in your business rather than in your long-term fixed assets, such as real estate and equipment. So, what’s the best way to finance your long-term fixed assets? Consider an SBA 504 loan, which requires minimum borrower equity. Here’s how it works: On most transactions your lender will finance 50% of the total project; the SBA, via a Certified Development Corporation (CDC), will finance up to 40%; and you, the business owner, will provide an equity injection of at least 10%. If the property is special purpose and/or the business is a start-up, the owner’s equity injection will increase, thus reducing the SBA’s portion.In the end you will have two loans; one with your bank of which the term, rate and fees associated with this loan are negotiated between you and your lender. Your bank’s loan will be secured with a first lien position on the assets being financed. The second loan will be provided by the SBA and administered through a CDC. It will have a fully amortized term of either 10 or 20 years depending on whether equipment or real estate is being financed and will have a low fixed rate of interest. What that means to you is there are no call dates, balloons and never a need to refinance. The SBA will take a subordinated lien behind your bank. The advantages to you are two-fold: low borrower equity injection and long-term fixed financing!

There is no upper limit to the size of the total project cost; however, the maximum SBA/CDC loan is $5.5 million.

Most costs directly related to the project are eligible to be financed with the SBA 504 loan program. Project costs can include, but are not limited to, land, building, construction, equipment, debt refinance and professional fees.

For a small business concern to be eligible for this program they must be a for-profit business, located in the United States, create and/or retain jobs or meet public policy objectives. The subject business, and any affiliated businesses, must fall within certain size standards set by the SBA. The maximum tangible net worth is $15 million and the maximum two-year average net income (after tax) must not exceed $5 million. Most small businesses qualify for the SBA 504 loan program.

As Minnesota’s first statewide Certified Development Company,Minnesota Business Finance Corporation (MBFC) is a private not-for-profit 501 (c) (3) organization licensed by the U.S. Small Business Administration, authorized to originate and service SBA 504 loans throughout Minnesota.

Featured on Fidelity Bank November Newsletter:

Please click here to access the webpage article.

Inver Grove Storage Awarded MBFC’s VetLoan Advantage Rebate

(Pictured: Larry Koland and Jerry Kotzenmacher)

(Pictured: Larry Koland and Jerry Kotzenmacher)

Minnesota Business Finance Corporation (MBFC) is proud to announce that another business owner has qualified for our VetLoan Advantage Rebate program based on their prior military service.

Larry Koland and Jerry Kotzenmacher, together with their spouses, are partners in Inver Grove Storage & Rental, in Inver Grove Heights, MN.   Both are employed full-time, but decided to start a self-storage business in 2003. Larry is retired from the U.S. Air Force, and through MBFC’s Vet Loan Advantage program received a rebate to offset some of the loan expenses.

As the business has grown, and demand for storage space has increased, they looked for expansion opportunities.  Another storage facility in Inver Grove Heights presented the perfect opportunity to expand. Michelle Mueller, Vice President of Business Development in MBFC’s Minneapolis office used the SBA’s 504 expansion with refinance program to facilitate the purchase.

The existing facility was appraised with sufficient equity to allow them to refinance the balance of the debt and purchase the new facility with a SBA 504 loan.  The loan carries a rate of under 5% and is fixed for 20 years.  Larry, Jerry, and their banker, Dave Mennen of Drake Bank, were all thrilled that the refinance with expansion program was available to fund the project.