Business Incentives

In an effort to assist Douglas County businesses grow and meet project financing shortfalls, the Alexandria Area Economic Development Commission can provide information and direction to individuals and companies about commercial financing and tax incentive programs. For information of specific programs and opportunities, please contact the AAEDC at (320) 763-4545. Please refer to the AAEDC's Financial Assistance Guide for additional information on these and other programs and contact the AAEDC with any questions or concerns.

Local programs include:

Revolving Loan Funds:

Revolving loan funds (RLF’s) can provide businesses with direct loans, loan guarantees, and other financial assistance. As the Fund receives the principal and interest payments from outstanding loans, the money is made available to another borrower. RLF’s are designed to alleviate the high cost and short supply of capital by providing flexible loan terms. Typically, RLF’s provide lower rates, longer terms, and reduce the overall risk of the loan.

Eligibility: Acquisition and/or improvement to land, building, business facilities and equipment, new construction or renovation of existing facilities, demolition, rehabilitation or site preparation, equipment and machinery purchase, or acquisition/improvement of real property for subsequent lease.

Maximum loan amount is $50,000. Funds cannot be used to finance working capital or professional fees.

Tax Increment Financing:

Tax Increment Financing is a method local governments use to pay for the costs of qualifying improvements necessary to create new development, redevelopment, or public assisted housing. The financing of the qualifying improvements is paid from the increased property taxes generated from new development, redevelopment or housing development that would not have occurred without such assistance.

Eligibility: Land acquisition, site work, administrative costs, city assessments, etc.

Tax Abatement:

Tax Abatement is a municipal financing program that uses the increase in property taxes generated from new development and redevelopment to pay for qualifying improvements. To qualify for Tax Abatement, a project must meet a number of public interest benefits established by Minnesota State Statutes. Each local unit of government, i.e. city, town, county, and school district can grant tax abatement for economic development purposes. The abatement for a parcel may be for any one of the following, but not a mixture of two or more of these types of abatements:

* A rebate of property taxes to the property owner;
* A reallocation of taxes to pay bondholders;
* A reallocation of taxes to pay for public infrastructure costs; OR
* A deferment of property taxes.

The Truth about Small Business Grants:

(These paragraphs were taken directly from Initiative Quarterly Spring 2007 Magazine “Mythology” by Britta Reque-Dragicevic)

Myth: There are “free money” government and nonprofit programs available to start small businesses.

Fact: In spite of those late-night television commercials, there is no such thing as free money. Period.

“Actually, the government does provide grants to help small businesses,” says Melvin Aanerud, Supervisory Lender Relations Specialist for the U.S. Small business Administration in Minneapolis, “but that money goes to Small Business Development Centers,” not directly to small business owners. “If the government had enough money to provide grants to everyone who wanted to start a business,” he says, “individual taxes would be higher, we’d have significantly more small businesses than there would be markets for them, and the economy would be in disarray.”