Business Development Programs

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.

West Central Initiative Logo

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.