On Friday, the MAGIC Fund Screening Committee will discuss a new initiative with potential impact that would benefit small businesses and start-ups in Minot and the region.

The proposal would commit $1 million over two years for potential loans for start-ups and expansions, outside of the “primary sectors” of economic development in Minot. The investment would be managed by Souris Basin Planning Council.

The proposed Business Fund Accelerator (BFA) would assist individuals and public or private entities in Bottineau, Burke, McHenry, Mountrail, Pierce, Renville and Ward counties. Seventy percent of the fund would need to be loaned within the city of Minot. Eligible projects would include business start-ups and expansions, new or expanding, non-residential childcare projects and new affordable multi-family housing units.

Notably the BFA is not meant to be a primary source of funding for recipient projects. Instead, participants will need to have primary funding with a financial institution, with the BFA loan acting more as a “gap” loan and intended to leverage state PACE and Flex PACE funding for entrepreneurs. PACE (primary sector oriented) and Flex Pace (other businesses) interest buydowns are integral to the plan. Potential BFA loan recipients are entities eligible under the PACE and Flex PACE interest buydown programs, and the goal is to match recipients of those programs with up to $70,000 from the Business Accelerator Fund.

The SBPC Loan Review Committee would analyze the requests and make recommendations to the organization’s board of directors for approval or denial. The BAF loans could be used to purchase real property, property improvements, equipment and certain working capital requirements. Since PACE can provide more financial assistance, SBPC would assist PACE applicants in seeking other funding sources when additional matching dollars are needed beyond the BAF limit of $70,000

The proposition demonstrates a focus on small Minot businesses and start-ups that has not always been the case. In the city, the MAGIC Fund has largely invested in economic development by working with primary sector industry and usually by attracting them to Minot.

Use of the MAGIC Fund has been controversial at times with members of the public, some of whom have expressed concern that they haven’t seen the results of its utilization.

Small business is the backbone of the economy and while it might be the closures of big box retailers that are most obvious signs of a struggling economy for merchants, hope still rests with the launch and expansion of small businesses.

Investing in smaller businesses outside the primary sectors makes solid sense. The devil will, of course, be in the details and the administration of the funding, should the measure come to pass. The screening committee will pass on its recommendation to the Minot City Council, which will make the final decision.