Two-Percent Loans
What are City of Minneapolis Two Percent Loans?
Two-Percent Loans provide financing to small Minneapolis businesses (retail, service or light manufacturing) to purchase equipment and/or to make building improvements. A private lender provides half the loan at market rate and the City provides the rest, up to $50,000 at 2 percent interest. The loan term is set by the private lender and can be for up to 10 years. Bank fees vary, but the City charges a 1 percent origination fee with a minimum of $150 due at closing.
After the Business Finance Division of the Department of Community Planning and Economic Development receives an application with supporting financial information and a lender-commitment letter, preliminary approval takes about one week, with up to two weeks to close the loan. The City cannot finance any work started prior to the loan closing.
Who is eligible for a Two-Percent Loan?
- All businesses located 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 Two-Percent Loan recipients must:
- Repay the loan and be an acceptable credit risk
- Use contractors licensed in Minneapolis
- Meet Minneapolis city codes for all rehab work or equipment installations
- Comply with Minneapolis zoning ordinances
- Make efforts to hire Minneapolis residents through cooperation with the CPED Workforce Coordinator, the Minneapolis Employment and Training Network as well as JobLink.
- Not use funds 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 and energy retrofits (including renewable energy)
- Handicap access
- Streetscape costs not financed by special assessment
- Production equipment
Equipment must be fixed
Financing of computers are approved on a case-by-case basis
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
Updated: April 18, 2011.
Last updated Jan. 11, 2013