Urban Initiative Loan Program
Overview
The Urban Initiative Loan Program was created to support the growth of minority owned and operated businesses and to create jobs in economically distressed areas of the Twin Cities. DEED provides grant funds to a network of nonprofit lenders which use these funds for loans to start-up and expanding businesses.
Eligibility
Start-up and expansion costs, including normal expenses such as machinery and equipment, inventory and receivables, working capital, new construction, renovation, and site acquisition are eligible for the program. Financing of existing debt is not permitted. Businesses eligible for loans include technologically innovative industries, value-added manufacturing, and information industries. It will not, however, make loans to liquor stores, taverns or saloons, businesses primarily selling tobacco products, or adult entertainment businesses.
Project Requirements
Project must demonstrate potential to create jobs for low-income people; be unable to obtain sufficient capital from traditional private lenders; and demonstrate the potential to succeed. Businesses must be located in Minneapolis, St. Paul, Bloomington, Brooklyn Center, Brooklyn Park, Burnsville, Columbia Heights, Coates, Coon Rapids, Fridley, Lauderdale, Lexington, Mendota, Miesville, New Germany, New Brighton, New Hope, Newport, Richfield, Spring Lake Park, South St. Paul, and West St. Paul.
Terms & Interest
Interest rate is between 2 percent and the Prime Rate plus 4 percent. Terms are generally consistent with other sources of project financing. Each nonprofit has authority to determine specific interest rate and collateral requirements.
Micro enterprises, including retail businesses, may apply for up to $25,000. Businesses that are seeking more than $25,000 will be required to find private financing to match the state’s investment. The maximum Urban Initiative investment in any one business is $150,000.
Urban Initiative Annual Report and Appendixes
Select from the links below to view, download or print our latest annual report and supplementary information.
For further information and referral to an appropriate certified partner organization, contact Bart Bevins, (651) 259-7424 or email Bart.Bevins@state.mn.us.