Business Development Fund
What is the Business Development Fund?
The BDF is a financial tool provided to Minneapolis based businesses for assistance in redevelopment projects that have a potential for the creation of jobs that will be filled by Minneapolis residents. The BDF provides Minneapolis business loans of up to $75,000 and the opportunity for prepayment credits to be earned for each Minneapolis resident hired (during the first three years of the loan) and employed at least one year.
BDF loans, provided by the City of Minneapolis through participating lenders, can be used in tandem with other City business assistance programs, such as Industrial Revenue Bonds and Capital Acquisition Loans. BDF loans are also provided to companies building or expanding on City industrial sites. BDF loans are intended to provide gap financing and must be leveraged with other financing.
Who is eligible for BDF loans and how can they be used?
Businesses located within the city limits of Minneapolis or moving into Minneapolis may apply. BDF loans are targeted at companies that will provide full-time jobs that pay $12 to $16 per hour plus benefits. Most participating BDF businesses have at least 20 employees and expect to add 10 jobs within the first three years of the loan.
BDF loans cannot exceed $75,000 or 50 percent of total project costs, whichever is less.
BDF loan funds may be used for:
- Production equipment
- Acquisition of business assets
- Move-In Costs
- Leasehold improvements
- Real estate or building expansion
BDF loan guidelines, terms and conditions
Businesses receiving BDF loans must sign a Job Linkage Agreement that the business will attempt to fill vacant positions with Minneapolis residents. For each resident hired (during the first three years of the loan) who is paid a living wage and remains employed full-time for a year, the business may receive a prepayment credit toward the principal balance of the loan.
- Maximum prepayment credits of up to 50% of the BDF loan.
- Prepayment credits are based on the amount of the BDF loan.
- Prepayments are credited 18 months after closing the loan and every 12 months over the next two years.
- Interest rate equal to matching bank lender rate.
- Maximum term is 10 years.
For more information contact (612) 673-5072.
All programs and guidelines are subject to change without notice.
Online information from the City of Minneapolis at MinneapolisMN.gov/CPED
Last updated May. 3, 2013