Elk River Launches Forgivable Business Loan Program
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UPDATED: Apr 29, 2013
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The city of Elk River, Minn., is hosting a forgivable business loan program.
Under the terms of the program, participating businesses must meet certain requirements in order to borrow business loans and then have their loans forgiven.
The program, which is under the oversight of the Elk River Economic Development Commission, has allowed Alliance Machine, Orluck Industries and Preferred Powder Coating to become the first three program participants.
These three companies will be required to offer at least six jobs each. Each job must offer an hourly wage of $12.19 along with benefits. Each company must fill these positions within two years. Subsequently, each job must be kept on for at least one year. If the three businesses meet these requirements within the designated time period, their business loans will be forgiven.
Dan Tveite, Chairman of the Elk River Economic Development Council, told loans.org that each business was given the opportunity to establish its location within Nature’s Edge Business Center. The decision to use the business center was left up to each of the program’s participants, and was not made by the city itself, even though the Center is owned by the city government.
Tveite is also optimistic that the companies will meet the program’s requirements for forgiveness.
“Honestly, I think that the businesses will reach the jobs in two years because they are expanding sooner, rather than later,” he said.
Regarding the required $12.19 hourly wage, Tveite said that number is merely a minimum amount requirement. Businesses can pay their hired employees more if they choose.
He also noted that this is the first time that Elk River has offered forgivable business loans. Should this program prove successful, the city will evaluate whether to run a second trial of loan forgiveness for other businesses.
Alliance Machine, Orluck Industries and Preferred Powder Coating were the only companies that applied to the program. Fortunately, all three met the criteria.
Despite the involvement of some federal grants, Tveite recognized that only the state government signed off on the program.
(Interview with Mr. Tveite conducted by Isaac Juarez)