Alternative Financing Program
What is the Alternative Financing Program?
The Alternative Financing program provides small Minneapolis businesses (neighborhood retail, service or light manufacturing) an alternative financing to the interest-based system that is in accordance with Islamic law, or Sharia. The program provides financing to purchase equipment and/or make building improvements. A private lender provides half the financing at their rate of return, and the City provides the rest, up to $50,000, at a 2 percent rate of return. The term (up to 10 years) is set by the lender. Private lender fees vary, and the City charges an origination fee of 1 percent of the City’s principal amount with a minimum of $150, due at closing.
After an application and a lender-commitment letter are received, preliminary approval takes about one week, with an additional two weeks to close the financing. The city cannot finance any work started prior to the closing.
Who is eligible for the Alternative Financing Program?
- All businesses in the City of Minneapolis
- The applicant may be individual owners, partnerships, corporations, tenant operators or contract for deed partners.
- Businesses that benefit low-to-moderate income persons by creating jobs or improving services
All eligible Alternative Finance applicants must
- Repay the funds and be an acceptable credit risk
- All rehab work and equipment installation must meet Minneapolis city codes
- Comply with the Minneapolis zoning ordinances.
- Make efforts to hire Minneapolis residents by working with the City’s Workforce Coordinator.
- Use contractors licensed in Minneapolis.
- Proceeds cannot be used for billboard advertising.
Eligible Improvements include
- Lighting
- Windows
- Walls, ceilings, floors
- Roofing
- Plumbing
- Electrical
- Mechanical Systems and Air Conditioning
- All work on the front and sides of business buildings facing public streets
- Cleaning, painting and staining of exterior surfaces
- Masonry repairs
- Repairing or replacing of cornices, entrances, doors, windows, decorative details and awnings
- Sign removal, repairing or replacement
- Architectural design services for plans and specifications
- Parking lots, including lighting, surfacing and landscaping
- Building identification
- Other items that are viewed necessary to complement the exterior of the building
- Building permits
- Energy audits
- Energy conservation and energy retrofits
- Handicap access
- Streetscape costs not financed by special assessment
- Production equipment
- Computers on a case-by-case basis only
Contact information
For more information contact (612) 673-5072.
All programs and guidelines are subject to change without notice.
This brochure is available in alternate formats. 
Online information from the City of Minneapolis at MinneapolisMN.gov/CPED
Last updated Jan. 11, 2013