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The Green Business Loan Fund targets entrepreneurs whose products and services help to protect and preserve the environment—recycling, renewable energy, waste transformation and emerging technology that reduces negative impacts on the environment. An equally important purpose of the fund is to reduce poverty by attracting profitable companies and living-wage jobs to low-income communities.
For business start-up and expansion projects, Initiative Foundation business financing programs meet the “gap” between the financing a local lender is able to provide and the equity the owner is able to contribute. Financial participation by a local lender is required.
Investment Amount: $50,000 to $250,000
Eligible Investments
- Ventures that incorporate environmental responsibility in business operations and mission.
- Ventures that capture an existing waste stream for productive and economic reuse.
- Ventures that reduce current energy demands or energy costs for residences or businesses
- Ventures that deliver a product or service associated with environmental preservation, conservation, protection, mitigation or clean-up.
- Funds can be used to support fixed assets such as real estate and equipment as well as working capital and product development.
The Green Business Loan Fund targets businesses that meet triple bottom line investment criteria:
1. Poverty reduction: Provide quality employment opportunities in central MN (living wage positions with benefits)
2. Environmental sustainability: Incorporate environmental responsibility in business operations and mission.
- Capture an existing waste stream for productive and economic reuse
- Reduce current energy demands or energy costs for residences or businesses
- Deliver a product or service associated with environmental preservation, conservation, protection, mitigation or clean-up.
3. Financial viability:
- Committed, experienced owners
- Clear, compelling, profitable business plan
- Partnership with local lender for primary financing
Collateral and Credit Worthiness
- Owner commitment (equity), credit worthiness, and capacity for repayment must be demonstrated.
- Personal guaranties from principal owners required.
- Collateral requirements are flexible and typically include a subordinate position to the primary lender on available business assets such as equipment and real estate. In addition, the Foundation may require liens on any intellectual property.
Terms & Fees
- Loans amortized up to seven years.
- Interest rates range up to 9% based on a risk-impact analysis.
- Start-up ventures may qualify for additional flexibility in repayment terms.
- Initiative Foundation charges a 1% origination fee, one-half of which is considered a non-refundable application fee. The borrower is also responsible for any documentation fees associated with closing the investment.
Ineligible Investments
- Businesses located outside of the Initiative Foundation 14 county central MN service territory.
- Conventional agriculture projects.
- Speculative real estate development (not owner occupied).
- Projects that do not meet green business criteria may qualify for one of the four other Initiative Foundation gap financing programs.
> Download the promotional flyer (PDF)
The Green Business Loan Fund was created with the support of a
$1 million investment from the Northwest Area Foundation.
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