Resources
Economic development in Clay County, MN is focused on fostering sustainable growth through strategic investments in infrastructure, education, and innovation, while supporting local businesses and attracting new industries to create a vibrant and diverse economy.
Business Development Programs are available in Clay County through West Central Initiative (WCI), a public foundation serving several counties in west central Minnesota, including Clay County.
The maximum total of loans to any one business is $300,000. For retail or local service businesses, the maximum loan amount is $35,000. In most cases, private investment and/or private financing is required, in addition to WCI loan funds.
Financing Programs
Small Enterprise Loan Fund (SELF)
- Typically these loans are to retail, service, manufacturing, or start-up businesses.
- Loan limits are $1,000 - $35,000.
- Interest rates are fixed for the term of the loan.
- Loan funds can be used for fixed assets and working capital.
- Insurance is required if assets are purchased, with WCI listed as loss payee. Life insurance is usually required on key owners/managers with WCI listed as beneficiary.
- Loan fees up to 1% of the loan amount.
- Out of pocket fees include any 3rd party fees incurred (attorney, title searches, UCC searches, abstract costs, etc.) and will be passed on to the loan recipient.
Business & Industry Loan Fund
- A gap lending program, projects require primary financing by a bank.
- Loans up to $300,000 for new start-ups and expansions.
- Most emphasis is placed on manufacturers or on other types of industry that will export products out of the region or cause money to come into the 9 county region from other areas.
- Interest rates are fixed for the term of the loan. Rates are usually lower than market rates available through commercial lenders.
- Collateral and personal guarantees required.
- Insurance is required if assets are purchased, with WCI listed as loss payee. Life insurance is usually required on key owners/managers with WCI listed as beneficiary.
Childcare Loan Fund
- Childcare loans are for expenditures required to obtain or maintain license.
- Loan sizes range from $500 to $3,500.
- See self loan guidelines above for additional information.
Lending Guidelines
The maximum total of loans to any 1 business is $300,000. For retail or local service businesses, the maximum loan amount is $35,000. In most cases, private investment and/or private financing is required, in addition to WCI loan funds.
WCI looks for loans to businesses that:
- Will create new and better paying jobs
- Can secure loan with tangible collateral
- Have cash flow to service debt
- Have a financing "gap"
Types of loans WCI usually cannot finance:
- Projects that can be financed without WCI
- Projects with little or no equity investments
- Loans to applicants with poor credit histories
- Businesses that are unduly speculative or lacking a business plan
- Businesses such as bars, restaurants, amusement centers, newspapers, media, or entertainment
- "Pirated" businesses brought into or relocated within our region without creation of new jobs
- Loans to businesses that are unduly competitive with similar businesses in the same trade area
- Loans to non-profit or governmental entities
- Consumer loans
- Real estate development
- Agricultural production
Collateral requirements for all loans:
- Collateral value must be determined through either cost, appraisal or depreciated tax value (book value)
- Collateral must be in good condition and contribute to the capacity of the organization
- Tangible collateral must have insurance in favor of WCI
- WCI must hold title cards on titled vehicles used as collateral
- Collateral position must be available
- Personal guarantees from all substantial owners
- No subordinate liens to public sector lenders
- WCI will consider a security position in personal property
Real Estate:
- Property must be general purpose, or easily adaptable for alternative use
- All real estate loans over $25,000 require a real estate appraisal
- Property needs to be located in an appropriate commercial location
- Property will be subject to environmental reviews and/or audits, as applicable
- Applicant must indemnify WCI against hazardous waste, products or conduct
- Prior to closing a loan, WCI requires any existing problems or title defects (such as liens, judgments, etc.) to be resolved
Application Procedures
Applicants are encouraged to discuss their project with West Central Initiative before submitting an application. Contact:
West Central Initiative
Dale Umlauf
Vice President of Business Development
Email West Central Initiative
Phone: 1-800-735-2239 / 1-218-739-2239
Fax: 218-739-5381
Applications are available through West Central Initiative's website. Use the Small Enterprise Loan Fund (SELF) application form found under the Applications, Loan Applications area of the website. Completed applications should be mailed or delivered to:
West Central Initiative
Business Development
P.O. Box 318
Fergus Falls, MN 56538-0318
Completed applications are reviewed as they are received.
Building a Stronger Community by Helping Your Business Succeed
The Clay County Loan Fund (CCLF) is a component fund of West Central Initiative (WCI), which was established by the citizens of Clay County (outside of the Moorhead area) to provide additional job opportunities and improve the quality of life in Clay County, Minnesota. (See the CCLF news release and CCLF brochure available on the WCI Component Fund Toolkit webpage.)
The CCLF Revolving Loan Fund is designed for:
- Business start-ups and expansion
- Succession or preservation of businesses
- Tourism
- Childcare
- Job creation and retention
- Other economic development activities for the benefit of the people living and working in Clay County, Minnesota (outside of the Moorhead area)
We Want to Help You Obtain Your Dreams
The CCLF assists businesses that demonstrate a "financing gap," that mostly likely would not succeed without CCLF support.
Financial Gaps
Financing gaps usually take 1 of the following forms:
- The collateral available will not fully satisfy the underwriting standards of commercial lenders for a loan of the size needed for the project to go forward.
- There is insufficient equity available to qualify with a commercial lender for the proposed new lending.
- The business is at the maximum allowable lending limit for its commercial lender.
- The cash flow available to repay the debt is insufficient to repay a loan made at standard commercial terms.
- The project is not economically competitive in a Clay County location with standard commercial financing.
Matching & Collateral Requirements
CCLF will generally provide no more than 50% of the funding required for a project.
All loans must be collateralized. The evaluation of the value of the collateral is at the discretion of the CCLF. Personal guarantees are required on all loans.
Eligible Uses of Loan Funds
The specific use of loan funds received from CCLF must be directly tied to the project's purpose, such as real estate, machinery or equipment, working capital, inventory and related expenses and professional fees. Loans may not be used for debt refinancing or for fees charged for the preparation of applications materials.
Loan Program Terms
Interest Rates
The interest rates for CCLF loans will generally be set at or below New York Prime Rates.
Term & Amortization
The term over which loans made by CCLF will vary depending on the life of the assets used as collateral. Occasionally, the CCLF will agree to amortize a loan over a longer period than its term in order to improve the cash flow of a project. When this is done, a balloon payment of the remaining principal will be due at the end of the loan's term. Depending upon the type of loan, the maximum term which will generally be considered for a loan from CCLF will be 7 years.
Loan Size
The maximum loan size is currently set at the greater of up to $20,000, or 10% of the net assets of CCLF. Due to its relationship with WCI, the CCLF can sometimes coordinate its participation in larger projects with the various loan programs offered through WCI, resulting in a larger financing package.
Application & Origination Fees
There is no application fee, but a 1% origination fee will be charged.
Closing Costs
Successful applicants will be charged for all out-of pocket costs required for closing their loan. This typically includes costs for preparing closing documents for reviewing and recording security positions on collateral offered, and, where necessary, for appraisal of collateral.
Application Procedures
Interested parties are strongly encouraged to discuss their project with West Central Initiative before submitting an application. Contact:
West Central Initiative
Dale Umlauf
Vice President of Business Development
Email West Central Initiative
Phone: 1-800-735-2239 / 1-218-739-2239
Fax: 218-739-5381
Applications are available through West Central Initiative's website.
Completed applications should be mailed or delivered to:
West Central Initiative
Business Development
P.O. Box 318
Fergus Falls, MN 56538-0318
The CCLF will not approve requests that would result in undue competition with Clay County firms for sales of goods or services in the local market area.
The Clay County Economic Development Authority (EDA) implements the Clay County Business Subsidy Policy by offering tax abatement and tax increment financing (TIF) programs to potential businesses seeking to locate or expand in Clay County but are outside a political subdivision or existing EDA. More information about the Clay County EDA and how to apply for these programs is available by following the links below.