Small Business Real Estate Acquisition Loan Program
The Small Business Real Estate Acquisition Loan Program enables small business owners to obtain financing for real estate acquisition of commercial and industrial properties in which to operate their business. The program is a partnership between a private lender, the City of Minneapolis and the Metropolitan Consortium of Community Developers (MCCD) The lender finances 50% of the acquisition, MCCD provides 40%, the City provides 5% and the borrower contributes the remaining 5% as an equity injection. MCCD’s 40% is capped at $400,000 and the City’s 5% share is capped at $40,000. Loan applicants must occupy a minimum of 25% of the commercial property to be acquired, as their principal place of business.
Who is eligible for loans and how can they be used?
Small business owners seeking to purchase property in which to operate their business in the City of Minneapolis are eligible for financing through this program. No geographical restrictions within Minneapolis apply to the program. The business must occupy at least 25 percent of the space. Loans can be used to:
Acquire commercial and/or industrial properties
Rehabilitation of commercial/industrial properties in conjunction with property acquisition. If rehabilitation is involved, the private lender must provide the construction financing and MCCD will provide the 40% in the form of permanent financing and the time the construction has been completed.
Loan terms and conditions
Applicants must comply with the terms, conditions and eligibility standards established by the participating lender.
Terms and conditions for MCCD’s 40% share will typically mirror those established by the private lender. MCCD’s loan will be priced at the lender’s rate and may be amortized over 20 years, with a term not to exceed 10 years. The City’s 5% loan will also be priced at the lender’s rate with a term and amortization not to exceed 10 years.
MCCD and the City loans are secured by a second mortgage on the property being financed.
1% origination fee on City’s portion of the loan is due at the time of closing
Loan applicants should return a completed loan application with the following information:
Prior two year business financials and tax returns.
Business owners’ personal financial statement and prior two years tax returns
12-month cash flow projection
Business plan (if available).
If financing includes rehabilitation; bids/estimates of work to be done.
Applications to or for more information contact (612) 673-5072.
105 – 5th Avenue South, Suite 200
Minneapolis, MN 55401
Last updated Jan 11, 2013