As environmental regulations are constantly evolving, many small businesses in Minnesota are exploring opportunities to upgrade equipment, reduce pollution, or remediate contaminated sites. To support these efforts, the Minnesota Pollution Control Agency (MPCA) offers two different types of loans through their financial assistance program that can make a meaningful difference for applicable businesses.
To qualify for any of the loans within the program, businesses must meet the following criteria:
- Be located in Minnesota
- Have fewer than 100 full-time employees
- Earn less than $500,000 in after-tax profits annually
- Demonstrate ability to repay the loan
Direct Loan Program
For small businesses looking to reduce air emissions, minimize waste, or address site contamination, the MPCA provides zero-interest direct loans of up to $100,000. These funds can be used for capital equipment purchases that help a business meet or exceed environmental requirements, or for cleanup-related costs.
Direct loans have a 25% applicant match (must be matched by a minimum one dollar from the applicant for every four dollars received in the loan). Start-up businesses may also be eligible for direct loans on a case by case basis.
Loan terms include up to a seven-year repayment period, no interest, and flexible collateral requirements. Applications are accepted on a rolling basis, allowing business owners to apply at any time of year.
Participatory Loans for Larger Projects
For projects requiring more substantial investments, the MPCA also offers zero-interest participatory loans in partnership with private lenders. These loans are intended for capital costs that improve environmental performance, like machinery or equipment. Eligible businesses may qualify for up to $600,000.
Participatory loans must be matched dollar-for-dollar by loans from a participating financial institution. The financial institution will charge a competitive interest rate on the matching funds and an administrative fee may be added to the participatory loan to defray costs associated with the servicing of the Environmental Assistance loan by the financial institution.
Priority is given to projects focused on pollution prevention, green chemistry, source reduction, and waste diversion strategies like recycling and composting. Funding availability is based on a revolving loan fund and may vary throughout the year.
Supporting Business Growth and Environmental Stewardship
At Olsen Thielen, we work closely with small business owners to identify opportunities that not only strengthen financial performance but also support long-term sustainability goals. These MPCA programs can provide a valuable source of financing for applicable businesses.
If you’re considering an equipment upgrade, site cleanup, or other environmentally beneficial project, reach out to your Olsen Thielen advisor to discuss how these loan programs might align with your business goals.
How to Apply & Important Resources
The Environmental Assistance loan program accepts applications on a continuous basis. Submit completed applications to Grants-Loans.pca@state.mn.us.