The City of St. Paul is providing $500,000 in low-interest loans to incentivize businesses in areas of concentrated poverty (ACP50) to hire St. Paul residents.
ACP50 areas are defined as neighborhoods where 50 percent or more of the residents are people of color, and 40 percent or more have family or individual incomes that are less than 185 percent of the federal poverty threshold. Incentives include up to 20 percent principal forgiveness for initial job creation, with additional forgiveness of up to 30 percent for hiring residents who also live in these ACP50 areas. In order to maximize the principal forgiveness, the business must remain in place and retain those jobs for a five-year period.
If a loan is secured, a fee equal to 1 percent of the loan principal issued will be due on the closing date. Funds can be used for any business-related purpose related to job creation, such as exterior or interior building improvements including parking, lighting, and landscaping, leasehold improvements, professional fees in conjunction with the completion of a project, furniture, fixtures and equipment purchases, inventory purchases or working capital.
Applications for Job Opportunity Fund loans are accepted on a first-come, first served basis, and will be reviewed by city staff. Businesses can receive a $10,000 maximum loan for each new, full-time equivalent job created, with a maximum total loan of $100,000. The Housing and Redevelopment Authority (HRA) will need to approve any loan requests over $50,000.
A $75 application fee is due at the time an application is submitted. For assistance, contact Vong Thao at (651) 266-8557 or email@example.com.
The business must be currently located, or if new will operate, within an ACP50 area or across the street from eligible businesses (e.g., the north side of Selby Avenue between Lexington Avenue and Mackubin Street is within an ACP50 area, businesses on the south side of Selby would also qualify).
In order to maximize the principal forgiveness, the business must remain in place and retain the jobs for a five-year period. Start-up business must have a business plan and monthly income and cash flow projections for at least three years.
Funds must be matched with private debt or equity of at least 30 percent for existing businesses and of at least 60 percent for a start-up business. For example, an existing business’ request for $10,000 must be matched with at least $3,000 (minimum total project cost of $13,000) and a start-up business’ request for $10,000 must be matched with at least $6,000 (minimum total project cost of $16,000).
Addition information on the funds available in online at www.stpaul.gov/departments/planning-economic-development/economic-development/job-opportunity-fund.