Two Percent Loans

Small business owners can use a Two Percent Loan for building improvements and equipment purchases.

Start, maintain or grow a neighborhood business

The City supports the growth of small neighborhood businesses. We can help fund building improvements and equipment purchases.
  • If your business is in a designated commercial area we can match private lender funds up to $75,000.
  • If your business is outside a designated commercial area we can match private lender funds up to $50,000.

More details

Eligibility and use

  • Your business must be located within Minneapolis city limits.
  • Business use must comply with Minneapolis zoning ordinances.
  • Building improvements paid for by the loan must:
    • Use contractors licensed in Minneapolis
    • Follow all Minneapolis permitting requirements and city codes
  • We only fund work that is started after we approve funding.
  • If you move the business outside of the City the loan becomes due. You need to repay it in full.

See examples of approved improvements and purchases

Terms and conditions

You must

  • Be an acceptable credit risk
  • Repay the funds

Your private lender

  • Sets their finance terms
  • Charges a fee; amount varies by lender

The City

  • Charges a one percent origination fee ($150 minimum) due at closing
  • Charges two percent fixed interest on loans or a two percent rate of return on alternative financing
  • Loan term must be equal to or less than the private lender term, with a maximum of 10 years
Person's hands typing on laptop.


Complete our common application for small business financing.

Contact us

Business Development Team

Community Planning & Economic Development





Public Service Building
505 Fourth Ave. S., Room 320
Minneapolis, MN 55415