Frequently Asked Questions for Businesses: Eligible Businesses
Other Business Questions
General
Eligible Uses of Loan Proceeds
Procedures
How do I know if my business
is eligible? 
It probably is eligible if you answer "yes" to four simple
questions:
- Is your business unable to obtain conventional financing at reasonable
terms?
- Are you actively engaged in the day to day operation of your business?
- Does your business employ 50 or fewer full-time equivalent employees?
- Will your business create or retain jobs?
Besides certain start-ups, are
there other types of businesses that do not qualify?
Yes, the following types of businesses are not eligible for a guarantee:
- Businesses involved in direct production of agricultural commodities;
- Community based residential facilities;
- Adult entertainment businesses;
- Businesses where more than 1/3 of gross sales come from gambling;
- Businesses where more than 3/4 of gross sales are from alcohol;
- Businesses where the principals owe past due child support; and
- Businesses engaged in real estate investment or speculation.
What is the definition of a start-up
business?
A start-up business is one of the following:
- A new business; or
- An existing business with less than 12 months' operating history.
Although most start-ups are not eligible, exceptions to this are new
day care facilities and a new business that will be located in a vacant
storefront in the downtown area of a rural community. A rural community
is defined as "(1) a city, town or village in this state with a population
of 12,000 or less, or (2) a city, town or village in this state that is
located in a county with a population density of 150 persons or less per
square mile".
What is the definition of an
existing business?
An existing business is defined as follows:
- A business that has been in operation for at least 12 months;
- A business that ceased operations within the last 6 months, but was
operating for at least 12 months before closing;
- An existing business being acquired by a new owner;or
- An existing business adding a complementary business, i.e. a motel
adding a restaurant.
Existing businesses that are relocating will be considered on a case-by-case
basis based on the reason for the move, distance from the current location,
impact on employment in the current area, etc.
Are cooperatives and nonprofit
organizations eligible?
Yes, as well as sole proprietorships, partnerships and corporations.
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