The Ultimate Guide to Minnesota Business Loans

Are you a small business owner in Minnesota searching for funding to grow, expand, or stabilize your business? Whether you’re launching a new startup, managing a nonprofit, or growing a real estate venture, Minnesota offers a wealth of business loan programs and tailored banking solutions to support entrepreneurs like you. From the Twin Cities to Greater Minnesota, there are countless opportunities to secure funding through local resources, government initiatives, and community banks.

This guide will walk you through the top Minnesota business loan programs, introduce you to key support organizations like the Small Business Development Centers (SBDC) and Minnesota Initiative Foundations, and explain why working with a community bank like Security Bank & Trust Co. can help your business thrive.

Why Business Loan Programs in Minnesota Are Crucial

Minnesota's economy thrives on small businesses, which are the backbone of both urban and rural communities. To support growth and sustainability, state and local governments, as well as nonprofit organizations, offer various funding programs with attractive terms like low interest rates, flexible repayment schedules, and even grants. These resources empower entrepreneurs to:

• Launch or expand their business.
• Cover operational costs.
• Purchase equipment or property.
• Invest in employee development and training.

However, navigating these funding opportunities can be tricky. Many business owners either don’t know about the available programs or feel overwhelmed by the application process. That’s why working with a local community bank or seeking assistance from organizations like the SBDC can make the process much smoother.

Key Business Loan Programs in Minnesota

Let’s break down some of the top loan programs available to Minnesota business owners:

1. Two Percent Loan Program (Minneapolis)

The Two Percent Loan Program offers a matching loan of up to $75,000, paired with a loan from a local financial institution, at an interest rate of just 2%. It’s perfect for businesses in Minneapolis’ designated commercial districts that need funding for property acquisition, renovations, or equipment purchases.

2. City of St. Paul STAR Loan Program

St. Paul’s STAR Loan Program (Sales Tax Revitalization) provides low-interest loans and grants to businesses that want to improve properties or boost job creation in St. Paul neighborhoods.

3. Minnesota Investment Fund (MIF)

The Minnesota Investment Fund (MIF) offers loans to businesses for industrial, manufacturing, and technology-related projects. It focuses on job creation and economic development, making it ideal for larger-scale projects.

4. Small Business Administration (SBA) Loans

Minnesota businesses can also take advantage of SBA loans, which include 7(a) loans, 504 loans, and microloans. These federally-backed programs provide competitive interest rates and flexible repayment terms for businesses in any industry.

Business Loan Resources Across Greater Minnesota

For entrepreneurs outside of the Twin Cities, there’s a treasure trove of resources specifically designed to support Greater Minnesota businesses:

Minnesota Initiative Foundations

The Minnesota Initiative Foundations are regional organizations that provide loans, grants, and entrepreneurial training. Each foundation focuses on strengthening the local economy by supporting small businesses, especially in rural areas.

For example, two foundations that Security Bank & Trust Co. have worked with on projects over time to support our local Minnesota small businesses are:

• The Southwest Initiative Foundation offers loans in Southwestern Minnesota to help small businesses expand, create jobs, and improve economic vitality in rural communities.
• The Initiative Foundation supports Central Minnesota businesses with funding for capital improvements, working capital, and equipment purchases.

Explore the full list of Initiative Foundations and find support in your region at Greater Minnesota Initiative Foundations.

Small Business Development Centers (SBDC): Your Free Business Ally

One of the most valuable resources for Minnesota entrepreneurs is the Small Business Development Centers (SBDC). These centers provide free, personalized business counseling, training, and support for everything from creating a business plan to applying for financing. Whether you’re based in Minneapolis, St. Paul, or rural Minnesota, there’s an SBDC near you ready to help.

Visit the SBDC Minnesota website to find a center near you and get expert guidance on your funding journey.

How to Strengthen Your Loan Application

Securing a business loan doesn’t have to be complicated if you come prepared. Here’s how to improve your chances of approval:

1. Build a Strong Business Plan: A clear, detailed business plan shows lenders that you’re serious and capable of managing your finances.
2. Connect with the SBDC or Initiative Foundations: Take advantage of their free services to fine-tune your business plan and loan application.
3. Work with a Community Bank: Local banks, like Security Bank & Trust Co., understand your market and can offer personalized support throughout the process.
4. Organize Your Documents: Be prepared with financial statements, tax returns, and any necessary legal documents to streamline the application.

Learn about building a strong application by reviewing our Commercial Loan Application Checklist and our Guide to Business Loans. 

Why Choose Security Bank & Trust Co.?

At Security Bank & Trust Co., we specialize in helping Minnesota businesses succeed. From closely-held businesses to nonprofits and real estate ventures, we offer customized banking and loan solutions to fit your unique needs. Here’s why you should work with us:

• Local Expertise: We know Minnesota’s business landscape inside and out, giving you access to valuable insights and connections.
• Tailored Solutions: From working capital loans to commercial real estate financing, we provide the right financial tools to help you thrive.
• Personalized Service: We’re not a one-size-fits-all bank. We take the time to understand your business goals and craft solutions that work for you.
• Commitment to Growth: Your success is our priority, and we’re here to help you every step of the way.

Take Action Today!

With so many business loan options and resources available across Minnesota, there’s no better time to secure the funding you need. Whether you’re based in Minneapolis, St. Paul, Twin Cities Metro Area, or Greater Minnesota, you have access to valuable programs and support to help your business grow.

Let Security Bank & Trust Co. be your trusted partner in achieving your financial goals. Contact us today to start your funding journey and take your business to the next level!

Security Bank & Trust Co. is a Member FDIC and Equal Housing Lender.