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July 2014 OPERATING GUIDELINES FOR �- REVOLVING LOAN FUNDS SEEDED BY STATE MINNESOTA INVESTMENT FUND AWARDS A local unit of government may establish a Revolving Loan Fund (RLF) with funds from a variety of sources. The guidelines outlined in this document pertain only to a RLF seeded with funds received through the repayment of a loan provided from the state - funded Minnesota Investment Fund (MIF) or Economic Recovery Fund programs administered through the Department of Employment and Economic Development or its predecessors. The local government must follow the RLF guidelines that were submitted with the initial MIF application and approved by your DEED Senior Loan Officer. Although the guidelines provide the policies and procedures for the reuse of these funds, the RLF policies and procedures must also adhere to the same requirements that are followed by the state's Minnesota Investment Fund program. In addition to the local government's underwriting criteria, the guidelines from Minn. Stat. 116J.8731 (some of which is summarized below) and from the Minnesota Business Subsidy Law (Minn. Stat. 116J. 993 and 116J.994) must be included in the policies and procedures General Purposes and Guidelines for RLFs Seeded by the Minnesota Investment Fund Purpose and Goals The purpose of the RLF is to provide financial and technical assistance for the creation and retention of new employment. These objectives may be accomplished through the following means: 1. Create /retain permanent private sector jobs to fuel above - average economic growth consistent with environmental protection; 2. Investment in technology and equipment that increase productivity and provide for higher wages; 3. Leverage of private investment to ensure economic renewal and competitiveness; 4. Increase the local tax base to guarantee a diversified industry mix; 5. Improve the quality of existing jobs, based on increases in wages or improvements in the job duties, training, or education associated with those jobs; 6. Improve employment and economic opportunities and create a reasonable standard of living; and 7. Enhance productivity growth through improved manufacturing or new technologies. One way to meet these objectives is to assist businesses that have location options outside Minnesota. These firms bring income into the state and raise the overall standard of living. Eligible Expenditures The MIF- seeded funds may be used in a variety of ways include example noted below. More information is available in Minn. Stat. 116J.8731 and through conversations with your loan officer. I. Provide loans, loan guarantees, interest buy- downs, and other forms of participation, ensuring that RLF funds are matched by private financing. 2. Fund strategic investments in renewable energy market development. Any expenditure for external marketing for renewable energy market development is not subject to the matching requirements listed above. 3. Provide entrepreneurs with training, other technical assistance, and financial assistance as defined by federal guidelines.