Working Capital Guaranty Program

The Working Capital Guarantee 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) guarantees a portion of the financing up to 80% of the first $50,000 and up to 50% of the remainder. Although there is no limit to the amount of financing provided by the bank, the City’s maximum guarantee is $75,000.

Minimum requirements for eligibility

  • Applicant completes the CPED Small Business Loan Application and applies to a private lender.
  • 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.

Guaranty 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 Guarantee Fee with a minimum of $150.
  • 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.

Eligible uses

Loans cannot be used to refinance existing business or personal loans, but may be used for:

  • General business operations
  • Working capital
  • Production contracts
  • Inventory
  • Receivables

This guaranty program is separate from the City’s other financing programs, and cannot be used to guarantee the City’s “Two-Percent Loans,” the “Commercial Corridors Two-Percent” or the uninsured portion of an SBA guaranteed loan.

For more information, contact Jessica Green at the City of Minneapolis at (612) 673-5232, or Becky Shaw at (612) 673-5066.

All programs and guidelines are subject to change without notice
Online information from the City of Minneapolis at www.ci.minneapolis.mn.us/cped
Updated October 28, 2008