What Minority Business Owners in Minneapolis Need to Know About CPDF Loans

As a minority business owner in Minneapolis, navigating the world of financing can be daunting. However, there is a tool that you should know about that can make it easier for you to achieve your business goals. The Commercial Property Development Fund (CPDF) is an economic development financing tool of the City of Minneapolis that can provide forgivable patient debt capital for commercial real estate development and acquisition. In this article, we will explain what you need to know about CPDF loans and how they can benefit your business. 

Terms and Conditions of CPDF Loans 

First and foremost, it's important to understand the terms and conditions of CPDF loans. The maximum loan amount is the smaller of 33% of approved project costs or $7.5 million, and the expected loan amount based on the current fund pool is between $400,000 to $800,000 per project. The loan term is 40 years, and the interest rate is 0%.  

Repayment of the full principal balance is due if there are changes in property ownership to a non-qualified heir or successor owner(s) without the consent of the City or a material change in use of the property without the consent of the City. However, if the borrower meets certain conditions, the principal balance can be forgiven at the end of the term. 

Who Can Apply for CPDF Loans in Minneapolis 

To be eligible for a CPDF loan, you must be an individual owner, partnership, corporation, cooperative, or any other legally recognized form of business organization in active, good standing with the Minnesota Secretary of State, located in or willing to relocate to the City of Minneapolis. You must also have the ability to service any projected debt obligations and be an acceptable credit risk. Your property status must be up to City code or be brought up to code and exist as a conforming use or a legal non-conforming use under the City's Zoning Ordinances. All property taxes and assessments of the subject property must be current, and the subject property must fully comply with all applicable regulatory requirements. You must have proof of ownership of the subject property or valid proof of site control, and the subject property must be within the City of Minneapolis. Additionally, you must demonstrate the ability to finance the project with other leveraged financing. 

How CPDF Loans Can Benefit Your Business 

So, what can you use a CPDF loan for? The possibilities are vast and include land and building purchases, hard construction costs, construction-related fees and professional services, exterior and interior repairs and improvements to buildings, building components, including HVAC systems, plumbing, electrical, etc., façade improvements, including sign repair or replacement, soft costs, including design services, building permits, energy audits, etc., parking lots, including lighting, surfacing and landscaping, streetscape costs not financed by special assessment, production equipment (fixed), and environmental sustainability and green building features or techniques. 

Steps to Apply for a CPDF Loan in Minneapolis 

It's important to note that before applying for support from the CPDF, you should contact the Business Development Division of CPED and discuss your proposed project with CPED staff. The application requirements can be a bit complex, so it's crucial to have a good understanding of what's needed before beginning the application process. Avisen also has considerable experience helping clients with CPDF loans, and we’d love to speak with you about your application or business. 

The requirements outlined by the CPDF should be viewed as a guide, and not necessarily representative of the total information needed. It's always a good idea to provide any information that you believe will be helpful to the City in evaluating your application. The materials required for the application include a detailed sources and uses of funds statement, a 10-year operating pro-forma, financial statements, project visuals, a market study, and the City's consent for release of response data and certifications. 

Please note that there is a $500 non-refundable application fee and all applicants are required to meet with or speak with a CPED staff person before submitting an application for support from the Commercial Property Development Fund. This pre-application meeting is necessary to ensure that projects are eligible for funding and that potential applicants are aware of the requirements to qualify. 

If you have any questions or need help with the application process, please don't hesitate to reach out to Avisen. We are here to help and support you throughout the application process to help you get the funding you need to develop or redevelop your commercial property. 

Why CPDF Loans are a Powerful Tool for Minority Business Owners in Minneapolis 

Now that you know all about CPDF loans, you may be wondering how they can benefit your business specifically. First and foremost, CPDF loans can help you fill significant funding gaps by providing patient debt capital on favorable terms. This means that you can focus on developing and acquiring commercial real estate in economically challenged areas of Minneapolis without worrying about exorbitant interest rates or repayment terms that aren't feasible for your business. 

Furthermore, CPDF loans can help you improve your property and make it more attractive to customers. Exterior and interior repairs and improvements, façade improvements, and energy audits are just a few of the ways that CPDF loans can help you create a more welcoming and efficient business environment. 

Lastly, CPDF loans can help you support environmental sustainability and green building features or techniques. This is an increasingly important consideration for customers and can help you attract a broader audience. By incorporating green building techniques into your property, you can reduce your carbon footprint, lower energy costs, and create a healthier work environment for your employees. These benefits can ultimately lead to increased profitability and a better bottom line for your business. 

At the end of the day, CPDF loans are a powerful tool for minority business owners in Minneapolis. By providing patient debt capital on favorable terms, CPDF loans can help you achieve your business goals and improve your property. If you're interested in applying for a CPDF loan, be sure to review the eligibility requirements and eligible uses carefully. And remember, all programs and guidelines are subject to change without notice. 

Contact Nokomis Legal for Minneapolis CPDF Loan Guidance 

At Nokomis Legal, we understand the unique challenges that minority business owners face. That's why we're here to help you navigate the world of business law and finance. Nokomis Legal can assist you with everything from entity formation to contract negotiations to financing. We're committed to helping you achieve your business goals and succeed in the Minneapolis community. 

If you have any questions about CPDF loans or need assistance with your business, don't hesitate to contact us. We're here to help you every step of the way.