Septic Tank Replacement Program
| Program Purpose: | To provide low-interest financing to existing tourism-related businesses providing overnight lodging that need to replace a failed septic system. |
| How it works: | Participation loans in cooperation with financial institutions can be made for up to 50% of the total cost of the project. |
| Eligible Applicants: | Corporations, sole proprietorships or partnerships engaged in an existing tourism-related business providing overnight lodging, including: resorts, bed and breakfast inns, hotels, motels, ski lodges, campgrounds and recreational vehicle trailer parks. |
| Ineligible Applicants: | Not for profit businesses and tourism-related businesses that do not offer accommodations. |
| Eligible Projects: | Replacement of an existing septic system that has failed. |
| Ineligible Projects: | Projects costs incurred more that 30 days before submission of a completed application are ineligible. Applications are not considered complete until DEED has approved the loan. |
| Maximum Available & Other Funds: | Participation Loans - Federal funds are used in conjunction with loaned funds from financial institutions. The maximum state loan may not exceed 50% of the total project costs or $65,000 whichever is less. |
| Terms: | The interest rate for septic system replacement loans will be fixed at two percent (2.0%) for a maximum of ten (10) years. The interest rate for the banks’ share of the loan is negotiated between the bank and the borrower. All loans must be secured by collateral and personal guarantee. |
| Approval: | Loan applications are reviewed and evaluated to determine eligibility, credit worthiness and a number of other factors. If the loan is approved, DEED enters into a loan participation agreement with the financial institution. |
| Contact: | Bradley Simenson of the Minnesota Department of Employment and Economic Development at 1-800-657-3858 or (651) 296-1145. |