Park Rapids EDA offers emergency ‘bridge loans’ to small businesses

The city's Economic Development Authority approves up to $145,000 in funding for fast-approval loans to keep small businesses afloat until state and federal assistance comes through.

The Park Rapids Economic Development Authority (EDA) modified the city’s temporary revolving loan fund Tuesday to support a small business bridge loan for local businesses during the COVID-19 pandemic.

During an emergency meeting held by conference call, City Administrator Ryan Mathisrud said city staff worked with Mary Thompson, executive director of the Heartland Lakes Development Commission (HLDC), to make funds available to provide short-term, gap financing for small businesses in the city.

Thompson explained that the state and federal government have funding sources to help businesses cover their financial needs during the COVID-19 pandemic. However, there will be a time lag between applying for and receiving funds through these programs.

A bridge loan was desired, Thompson said, so that businesses waiting for state or federal assistance can still pay their rent or mortgage, payroll and utilities during that time.

She said an executive order by Gov. Tim Walz allows government entities that have Minnesota Investment Fund dollars in their revolving loan fund (RLF), ordinarily reserved for industries, to assist retail and service businesses as well.


“Park Rapids is fortunate in that you do have some of those specific resources,” said Thompson. “This is really intended to be short-term, stopgap financing. … It really helps to keep (businesses) able to bridge the gap between what’s happening now and when some additional resources are available.”

Thompson shared information about the application process for the bridge loans, designed “to get the money out quickly.”

According to Mathisrud’s written summary of the proposal, the city would offer loans of up to $10,000 per applicant from an available pool of $145,000, but only to businesses that were in good financial standing as of March 1. With a six-month deferred payment, the loans would be due in two years.

The HLDC would administer the loan program, Thompson said, to make sure it is in compliance with the requirements of the Minnesota Investment Fund and Walz’s executive orders, do “due diligence and make sure that we’re making good loans, and to do it as quickly as possible.”

Thompson presented an addendum to the city’s RLF policy establishing what will be called the Peacetime Emergency Business Assistance Program, a sample of the loan application packet, a checklist of required documentation and a one-page summary of the program’s procedures and key assumptions.

Key assumptions of the program, according to the packet, include the following:

  • The revolving loan fund committee has “blanket authority” to approve or deny the loans.

  • The underwriter will typically be the lender currently working with the business on other COVID-19 related assistance, if any. Otherwise, staff will work with local banks to identify an underwriter to process the loan request.

  • The city would transfer the available funds to HLDC, to be held in a separate account to allow quick disbursement of approved loans.

  • The only fees that would be charged to businesses would be out-of-pocket processing costs incurred by the HLDC or the city – for example, for a credit report.

Follow-up documentation will be required to ensure that loan funds are used for eligible activities, Thompson said. Repayments will go back into the RLF.
She stressed that the loan program targets small businesses in the city impacted by COVID-19.

Regarding the amount of funding available, Mathisrud noted that when the Armory purchase is complete, costs reimbursed to the city will be folded back into the RLF. Thompson added that the $145,000 figure excludes a loan amount previously committed to a Park Rapids business.


EDA board member Liz Stone moved to approve the program. All members of the board (comprising the Park Rapids City Council and Mayor Ryan Leckner) voted in favor, except Tom Conway who was absent. Mathisrud reported that Conway had commented in support of the program.

For more information about the bridge loan program or to request application materials, contact your local lender or contact Thompson at 218-368-7980 or

Robin Fish is a staff reporter at the Park Rapids Enterprise. Contact him at or 218-252-3053.
What To Read Next
Get Local