City financing for smaller capital projects
Our Bank-Qualified Bank-Direct tax-exempt loan program provides cost-effective financing for:
- Capital projects for smaller nonprofit organizations with 501(c)(3) status
- Projects in the $500,000 to $2 million range
The program offers:
- Lower than typical conventional interest rates — a result of the tax-exempt status of interest to the bank purchasing the bonds, and
- Reduced cost of issuance and quicker turnaround from time from application to actual funding — because the program documents are pre-approved by the City of Minneapolis and Bond Counsel
Terms and conditions
- Bank-Qualified Bank-Direct tax-exempt revenue bonds can be issued below commercial market interest rates due to the tax-exempt status of interest to the bank purchasing the bonds.
- The interest rate can be variable or fixed.
- All documentation is prepared by bond counsel.
- All parties are represented by their respective counsel.
- Bank-Qualified Bank-Direct tax-exempt revenue bond issuance expenses include bond counsel and sometimes a financial advisor. These fees may be financed through the bonds up to certain limits.
This program is for smaller nonprofit organizations who are tax exempt under 501(c)3 of the Internal Revenue Code.
This program funds capital projects with improvements to the facility in the range of $500,000 to about $2 million
How to apply
- Complete an online application or request and complete a printed application form.
Include the following materials with your application
- Financial statements for the past two years and any interim statements
- Appraisals and environmental reports about the proposed project
You should know
- A City staff person will handle your loan application from initial inquiry through post-closing monitoring.
- The complete public approval process takes about 45-60 days after the application is received, if a bank has committed to purchasing the bonds.
- The City approves bank-direct loans based on the public purpose served, such as preserving and creating jobs, increasing the real estate tax base, and providing community services.