MN PROMISE Act offers small businesses ‘life-changing capital’ 

A quiet shift in Minnesota state policy could have major ripple effects for small business owners in North Minneapolis, South Minneapolis, and South St. Paul.

As of July 1, significant changes to the MN PROMISE Act loan program officially went into effect — updates that expand eligibility and increase how much entrepreneurs can borrow to build long-term wealth through commercial real estate ownership.

The PROMISE Act (short for Promoting Redevelopment, Opportunity, Manufacturing, and Innovation in Small Enterprises) was created in the wake of the 2020 uprising following the murder of George Floyd. The program is designed to address the economic fallout and longstanding disinvestment in historically Black and brown communities. 

By offering low-interest loans for commercial real estate purchases and improvements, the initiative seeks to strengthen business corridors and help entrepreneurs build generational wealth — not just survive. With the latest updates, the program is becoming even more accessible.

New changes and opportunities

According to Adrian Ruddock, vice president of lending and business consulting at the Metropolitan Economic Development Association (MEDA), the PROMISE Act is already having an impact — and the changes will only increase its reach.

“We went to the legislature and asked for these updates because we knew they would make the program more impactful,” Ruddock said in a recent interview. “And they listened.” Key changes include:

• A higher loan cap: Business owners can now access up to $1.5 million in financing (up from $1 million).
• A higher revenue threshold: Businesses with up to $1.5 million in annual revenue can now qualify.
• More flexibility with paperwork: Applicants can submit any two of their most recent tax returns, not just from 2021 and 2022.
• Debt relief for unfair financing: Businesses stuck in predatory seller-financed contracts can now refinance with a PROMISE Act loan at a 3% interest rate over 10–25 years.

The updated terms, Ruddock said, are designed to solve a specific problem: Too many entrepreneurs lease their storefronts or operate under unfavorable land contracts, unable to secure the capital or credit to buy property outright.

“Ownership matters,” Ruddock said. “Renting means you’re building someone else’s wealth. Owning means you’re building yours.”

Building equity, not just surviving

MEDA, which administers the commercial real estate loan portion of the program, was founded over 50 years ago to address racial and economic disparities in Minnesota’s business sector. It offers a three-part strategy for supporting BIPOC entrepreneurs: access to capital, technical business consulting, and professional network-building.

“You can’t just give someone a check and expect them to succeed,” Ruddock explained. “We provide coaching on how to operate efficiently, scale sustainably, and connect with key decision-makers and institutions.”

So far, interest has been high — more than 2,000 entrepreneurs have applied to the PROMISE Act program. While only 13 commercial real estate loans have closed to date, a reflection of the complex nature of property deals, MEDA currently has $13 million in active projects in its pipeline. The organization will continue processing applications on a rolling basis through June 2027, or until funding is exhausted.

Ruddock stressed that while commercial real estate deals take time, the long-term return is worth it.

“For many of our clients, this is their first opportunity to stop paying rent and instead invest in themselves,” he said. “It’s life-changing.”

Leveling the playing field

The geographic boundaries of the PROMISE Act are no coincidence. The program prioritizes commercial corridors in North Minneapolis, Lake Street in South Minneapolis, and parts of South St. Paul. These are areas disproportionately impacted by systemic disinvestment, discriminatory lending, and the 2020 civil unrest.

“These are communities that have been overlooked for decades,” Ruddock said. “And we’re here to help level the playing field.”

Historically, entrepreneurs in these neighborhoods have faced steep barriers to entry. Traditional lenders often require strong credit, extensive collateral, or high net worth — requirements that shut out many small business owners from ownership opportunities.

“The bank might ask you to put down twice the value of the property just to qualify,” Ruddock said. “That’s just not feasible for the average entrepreneur trying to run a business and support a family.”

By offering low-interest, long-term loans, the PROMISE Act creates an on-ramp to ownership — particularly for business owners operating under seller-financed land contracts, which can carry high interest rates and limited legal protections. Now those contracts can be refinanced through the program, giving business owners full ownership rights, tax benefits, and equity growth.

Remaining steadfast

As small businesses across Minnesota navigate inflation, staffing shortages, and political uncertainty, programs like the PROMISE Act serve as a stabilizing force.

“Yes, the national political climate is shaky,” Ruddock acknowledged. “But what we can control is our commitment to these entrepreneurs. With strong fundamentals — capital, technical assistance, and connections — we believe our clients can thrive no matter what.”

Ruddock sees MEDA’s work as more than just business development. It’s about economic justice.

“We believe economic development is a communal good,” he said. “We want to create a Minnesota where all entrepreneurs — regardless of race, background, or zip code — have a fair shot at success.”

The PROMISE Act loan program is accepting applications on a rolling basis until June 2027. Entrepreneurs interested in buying or improving commercial property in eligible areas are encouraged to reach out.

For more information, visit www.meda.net or contact MEDA directly to determine eligibility and get connected with a loan consultant.

Jasmine McBride welcomes reader responses at jmcbride@spokesman-reocrder.com.