Hennepin County Launches Dual-Track Program to Help Small Businesses Buy Commercial Real Estate

MINNEAPOLIS — Hennepin County has unveiled a two-pronged initiative designed to help small business owners secure stable commercial space and build long-term equity. The program combines a low-barrier loan fund with specialized technical assistance, targeting historically disadvantaged or resource-constrained entrepreneurs who face barriers to property ownership.

County officials say the program addresses rising commercial rents and the risk of displacement while helping businesses build generational wealth.

Bridging the Financing Gap

Central to the initiative is the Elevate Hennepin Commercial Property Ownership Loan Fund, seeded with $4.22 million from the County and administered through NextStage, a nonprofit community lender. The fund offers two loan products:

• Commercial Property Acquisition and Improvement (CPAI) Loans: Up to $250,000 with a fixed 5% interest rate. These loans are subordinate to the primary mortgage, and total secured financing cannot exceed 90% of the property’s appraised value.
• Equity Enhancement (EE) Loans: For qualifying projects, businesses may receive up to $100,000 at 0% interest. EE loans must be paired with a CPAI loan and cannot exceed 5% of appraised value; repayment is due at the end of the loan term.

Eligible businesses must be for-profit, located and registered in Hennepin County, have at least three years of revenue history, and employ fewer than 100 people. Projects must be under $5 million in total cost and owner-occupied. County officials estimate the fund could leverage up to $16 million in total financing, potentially aiding roughly 120 underserved businesses.

Technical Assistance: Preparing Businesses for Ownership

Complementing the loan fund is the Commercial Ownership Assistance (COA) program, which provides eligible businesses up to $10,000 in free consulting services. Entrepreneurs receive guidance from real estate finance experts, architects, and other specialists to evaluate potential acquisitions. Services include:

• Feasibility analyses and financial modeling
• Building condition assessments and preliminary code reviews
• Renovation cost estimates
• Operating pro-forma budgets and long-term maintenance projections

Applicants must have identified a specific property, demonstrate a 1:1 financial match for consulting services, and show financial need that makes traditional financing difficult. The program is intended for projects under $5 million.

Why Ownership Matters

County officials emphasize that owning commercial property — rather than leasing — can shield small businesses from rent hikes, displacement pressures, and uncertain lease renewals. Ownership can also help entrepreneurs build equity and stability, particularly in neighborhoods experiencing gentrification or rapid development.

Ryan Kelley, Hennepin County Community Investment Manager, noted: “It’s a struggle for small businesses to own their own real estate, and most owners aren’t focused on it. We developed this program to help business owners navigate the acquisition process from start to finish.”

Program Limitations

The COA program does not cover real estate brokerage fees, closing costs, or renovation expenses. Loans remain subordinate to traditional financing and are subject to underwriting by NextStage. Projects must be owner-occupied; speculative investments are ineligible.

A Strategic Step Forward

The dual-track program builds on Elevate Hennepin, a broader economic development initiative that began during the pandemic and has evolved into a long-term support system for local businesses. In addition to financing and technical support, Elevate Hennepin provides business planning, marketing, legal, and strategic guidance.

By pairing capital access with expert guidance, Hennepin County hopes to create a sustainable pathway for small businesses to own commercial property, strengthen their communities, and reduce inequities in commercial real estate ownership.

MinneapoliMedia