Working Capital Guaranty Program
What is the Working Capital Guaranty Program?
The Working Capital Guaranty Program is designed to help small businesses secure financing through private banking institutions. A private lender funds the loan, and the City of Minneapolis (CPED) guaranties a portion of the financing - up to 50% of the loan amount. Although there is no limit to the amount of financing provided by the bank, the City’s maximum guaranty is $50,000.
Terms and Conditions
- Guaranty provided for up to 5 years on term loans and up to 2 years on revolving lines of credit.
- Bank loan interest rate may not exceed Prime plus 3 percent.
- Borrower agrees to use technical assistance provided by the MCCD or as designee requires.
- Borrower will make efforts to hire Minneapolis residents by working with the City’s Workforce Coordinator.
- 1 percent Guaranty Fee with a minimum of $150.
In the event program funds are not sufficient to meet all eligible applications, priority will be given to businesses: 1) benefiting low- to moderate-income persons by creating jobs; 2) rehabbing or reusing a vacant structure; and 3) whose owner(s) has a personal net worth less than $1 million.
Who is Eligible
- Business should be in operation for 12 months (newer businesses may be considered on a case by case basis).
- Technical Assistance (mentoring) is available through the Metropolitan Consortium of Community Developers (MCCD) and may be required.
- Borrower must demonstrate the ability to repay the loan and be an acceptable credit risk.
- Be in compliance with all city code/licensing; and no building or health-code violations.
- Loans cannot be used to refinance existing business or personal loans, but may be used for:
- General business operations
- Working capital
- Production Contracts
This guaranty program is separate from the City’s other financing programs, and cannot be used to guaranty the City’s Two-Percent Loans or the uninsured portion of an SBA guaranteed loan.
How to Apply
Complete an online application here, or to request a printed application please call (612) 673-5072.
All programs and guidelines are subject to change without notice
Last updated Sep. 17, 2013