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What is Prairieland EDC’s Area of Operation?

Prairieland operates in the entire state of Minnesota and portions of Southeast South Dakota and Northwest Iowa. South Dakota counties include Brookings, Duel, Grant, Lincoln, Minnehaha, and Moody. Iowa counties include Dickenson, Lyon, and Osceola.

How can 504 funds be used?

  • Land or building acquisition
  • Building construction or remodeling
  • Acquisition of fixtures and heavy machinery
  • Transaction costs such as appraisal, title, and escrow, and 504 fees included in the financing (provided they are supported by the appraised value of the project)

What are the advantages of a 504 loan?

  • Long repayment terms (10-year, 20-year and 25-year options)
  • Fixed rate for the term of the loan
  • Collateral is typically the asset being purchased
  • Risk management tool for Third Party Lenders

How does a business qualify for the 504 program?

In order to qualify for the 504 program, the tangible net worth of your small business must be less than $15 million and the after-tax net profit must be $5 million or less, on average, for the prior two years.

How much space does the business have to occupy?

  • 51% owner occupancy for existing building purchase
  • 60% owner occupancy for new construction with the intent to occupy 80% long-term.

Occupancy Required

  • SBA lends to owner occupied small businesses
  • 51% owner occupancy for existing building purchase
  • 60% owner occupancy for new construction with the intent to occupy 80% long term.

Is Prairieland EDC part of the U.S. Small Business Administration (SBA)?

Prairieland EDC is a private not-for-profit Certified Development Company (CDC) that is authorized by the SBA to deliver and administer the 504 programs for projects in the state of Minnesota and parts of South Dakota and Iowa.

How much will the 504 program lend me?

There are no maximums on the size of the project, only on the portion that can be funded by the 504 program. The limitations are:

  • $5.0 million if the company has a majority owner and operator that is a veteran, minority, woman or if the business is located in a rural or other public policy goal area
  • $5.5 million for businesses qualifying as small manufacturers & renewable energy

Can a 504 Loan be used to refinance existing debt?

Yes… there are two SBA 504 refinance options:

  • 504 Debt Refinancing (No Expansion)
    • Refinancing existing commercial real estate and equipment debt that is at least two years old and does not have a business expansion or renovation tied to it.  This Program can help small businesses take advantage of below market, fixed interest rates.  This program is available for up to 90 percent of the appraised value of the eligible asset. Please contact Prairieland EDC for more details.
  • 504 Refinance with expansion
    • SBA 504 projects may include a limited amount of debt refinancing. If the project involves expansion of a small business applicant, any amount of existing indebtedness that does not exceed 50% of the cost of the expansion may be refinanced. The debt being refinanced will be added to the expansion cost to establish the total project costs, if all the conditions discussed below are met. “Expansion” includes any project that involves the acquisition, construction or improvement of land, building or equipment for use by the small business applicant.

Is there a lot of paperwork?

The paperwork is comparable to that of any business loan. The Loan Officers at Prairieland EDC will work with you to help you in completing the requirements, the processing of the application and closing of the loan.

How do I contact someone at Prairieland EDC?

You can contact Prairieland EDC by calling 1-800-507-9003 or by sending an e-mail to info@prairielandedc.com.

Your access to these programs has never been easier!

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