Hanover, MN

Hanover EDA Low-Interest Loan Program

Low interest loan funds are to be used for business start-ups, expansions, and retentions.  Through any of those activities, the overarching goals of this program are:
  •  Creation or retention of permanent private-sector jobs in order to create economic growth;
  • Stimulation or leverage of private investment to ensure economic renewal and competitiveness;
  • Increase the local tax base;
  • Improvement of employment and economic opportunity for citizens in the region to create a reasonable standard of living;
  • Stimulation of productivity growth through improved manufacturing or new technologies;
  • Fill a gap in a service or product that is not currently available in the city (i.e. senior housing, etc.).

Eligible applicants include businesses currently or proposed to be located within the corporate limits of the City of Hanover.
  • Loan amount -- Minimum $5,000; Maximum $100,000 or 90% of Low interest Loan Fund Balance, whichever is less. In certain instances the EDA can approve exceeding the maximum loan amount.
  • Location – The business/property owner must locate, expand or remodel within the corporate limits of the City of Hanover.
  • Conventional Lender or Equity – Conventional lending sources and/or owner equity must provide at least 50% of the total project financing.
  • Job creation/wages paid – Applicant must identify jobs to be created within two years and wages paid. 
  • Interest rate – Prime (as published by the Wall Street Journal) minus two, with a minimum interest rate of 2% and a maximum interest rate of 6%.
  • Terms – Equipment 7 years; Land/Building 10 years.
  • Other – Funds may be used to provide loan guarantees or interest buy-downs.
Loan dollars may be used for the following activities:
  • Acquisition of land;
  • Construction, reconstruction and rehabilitation of commercial or industrial buildings
  • Site improvements
  • Utilities or infrastructure
  • Machinery and equipment
Loan dollars may be used to provide assistance with loan guarantees, interest buy-downs, and other forms of participation with private sources of financing.  The Low interest loan fund assistance can be for no more than one-half of the cost of the project.
All loans must be secured with appropriate collateral.  This determination will be made by the EDA.
Low interest loan fund assistance may not be used for the following:
  • Any business that is not or would not conform with Hanover City Code or Zoning Ordinances.
  • Housing Projects
  • Operating Expenditures
The loan must be based on the following criteria:
  • Increase in tax base
  • The project can demonstrate that the investment of public dollars induces private funds
  • The project provides suitable wage levels to the community or will add value to current workforce skills
  • Assistance is necessary to retain existing business.

Loan applications shall be on a form provided by the City/EDA.  Complete applications received by the last Thursday of the month will generally be considered at the next monthly EDA meeting which occurs on the 2nd Thursday of the month at 8:00am at Hanover City Hall.  Upon recommendation from the EDA for approval, the Hanover City Council will review for final approval.
A 2% loan application/origination fee is charged at the time of EDA approval of the loan.  This is a non-refundable fee.