Loans

The Denver Microlending Program provides capital and support services to small businesses and entrepreneurs who lack access to traditional financial resources. Our goal is to help create, retain, stabilize, and expand local small businesses. The program provides small business loans to both startup or expansion companies in the amount of $5,000 to $50,000 with terms up to five years. 

The program’s broad goals encompass financial empowerment, community and individual wealth-building, job creation and retention, and neighborhood stabilization.

Applicants for this program meet at least one or more of the following characteristics: 

• Companies with less than $1 million in gross revenues
• Challenged with obtaining business financing through traditional sources
• Low- to moderate- income, as existing or aspiring entrepreneurs
• Strong links to neighborhood placement/preservation and service with focus on Denver's NEST neighborhoods 
• Minority or woman-owned 
• Multi-generational ownership
• Goal to create or retain full-time jobs in industries, such as manufacturing, technology and agriculture technology, outdoor recreation, professional/financial business services,  health care and bio sciences, energy, or authentic and vibrant retail and hospitality 

• Certified through Denver’s Division of Small Business Opportunity (DSBO)

Community Enterprise Development Services (CEDS) is our program partner. CEDS has unique experience identifying promising business start-ups or expansions and underwriting small business loans for what are sometimes marginalized and underserved businesses. CEDS has a proven track record of working with under-connected entrepreneurs and small business owners; and offer competitive interest rates when comparing similar lending institutions in the region. 

Start the application process through CEDS today. 

The Revolving Loan Fund (RLF) addresses the complexity of securing capital to start a business or to expand an existing operation, and enhances the ability of small business owners to obtain such resources. 

This gap financing program works by generally lending up to 25% of project costs, thereby inducing banks to provide the bulk of the financing for small businesses. If the business is minority- and/or woman-owned, the program provides 30% gap financing. Our participation can increase to up to 50% of the project costs, provided the project meets certain eligibility criteria and can demonstrate the financial need.

Program Goals

• To create permanent jobs and retain existing jobs for low- and moderate-income Denver residents
• To provide economic opportunities in Denver's targeted industrial and commercial areas for new and expanding job intensive industries
• To support underserved businesses and entrepreneurs, including businesses owned by minorities and women or in industries traditionally more challenged to obtain financing through traditional lenders.
• To stimulate the redevelopment of under-utilized and deteriorated commercial and industrial property for community-serving uses.

• A majority of the new or retained jobs of the business must be made available to low- and moderate-income Denver residents. These jobs should be entry level, or provide adequate training for entry level employees. Job recruitment efforts may need to be targeted to certain neighborhoods, and public transportation to the place of business should be adequate. Priority will be given to those loan applications that promote the creation of long-term, full-time employment, with good opportunities for career advancement and competitive wages.
• New equity and new private financing must be maximized, fully committed to the project, and account for at least 75% of total project costs. For minority and women-owned businesses, private commitments must account for at least 70% of total project costs. For projects proposed in Denver’s NEST neighborhoods DEDO may consider covering a wider finance gap, but private commitments must account for  least 50% of total project costs.
• City funding is limited to a maximum of $350,000 for each project, with a target of one job created for each $35,000 in loan proceeds. 
• The applicant must provide sufficient evidence that the amount of funds requested from the city is necessary for the project to succeed. This evidence may show a gap in available financing to cover project costs, the rate of return to the investor(s) is too low, or project costs related to the site is not competitive with alternative sites. 
• The applicant must demonstrate the ability to repay the city's loan and provide adequate collateral for securing the city's loan. 
• City loan proceeds can be used for a variety of project costs, including real estate acquisition, new construction, rehabilitation, equipment purchases, and working capital. City funds cannot, however, be used for the refinancing of existing debt. 
• Most construction costs funded by the city require payment of prevailing wage rates for construction workers.
• The interest rate, term, and amortization for the city's loan will be structured to allow for a reasonable rate of return to the investor(s) and adequate cash flow to service project debt. 

• Contact the DEDO Business Development team for more information, including the requirements for submitting an application. We will also connect applicants to technical assistance resources, if they need help in preparing the application. 
• After the applicant has prepared a complete business plan, the next step is to secure all of the equity and private financing available for the project. The applicant can explain the city lending opportunity to investors and banks to further induce them to participate in the project. 
• If sources of funding fall short or other economic deficiencies exist in the project, the applicant may submit an application for RLF funding to DEDO.
• We will analyze the loan application and advise the applicant of any deficiencies which need to be addressed. Once an application is complete and meets the criteria for the RLF Program, we will recommend the application to the loan review committee for approval. The loan approval process takes approximately two weeks after we receive a completed loan application.
• Once the loan application has been approved for funding, DEDO will request that the City Attorney prepare a formal loan agreement.
• Upon full execution and satisfaction of the contingencies of the loan agreement by the applicant, a loan closing will be scheduled. Depending upon the complexity of the loan application, the execution of the loan agreement and the loan closing process can take an additional four to six weeks.

“Gap” financing may be available up to 25% of total project cost under the Revolving Loan program, with a cap of $350,000. In the Microlending program, loans are capped at $50,000. 

Interest rates are based upon a determination of what is necessary and appropriate for the transaction. Typically, the private financing is made available at market rates, while DEDO's participation is at a below market rate. 

Preliminary approval of an application usually takes two weeks from the submittal of a complete application, including firm commitments of private financing. The processing of a formal city loan agreement and the closing of the loan takes approximately 12 weeks. 

We look at the economic feasibility and evidence of repayment ability of the proposed project and benefits to the city (neighborhood impacts, creation of jobs, and so on).