Financing

Whether you’re a start up looking to open your first store or an established business looking to expand, securing all the necessary financing to turn your business opportunities into reality can be a difficult task.  For businesses that locate or expand in targeted industrial or commercial business areas within the City, the Denver Office of Economic Development Small Business Lending Group offers “gap” financing to eligible start-up and/or expanding businesses.  

There are two gap financing programs available to businesses depending on the business location:

Revolving Loan Fund (RLF)

Securing the capital needed to start a new company or expand an existing operation has become increasingly difficult. Responding to that need, the Office of Economic Development (OED) has developed the Revolving Loan Fund program (RLF) to enhance the ability of business owners like yourself to secure the necessary capital to finance start-up ventures or business expansion projects. This gap financing program works by lending up to 25% of project costs, thereby inducing banks to provide the bulk of the financing for small businesses.

Besides filling the financial gap, the RLF program helps to stimulate job creation and revitalize under-utilized or deteriorated commercial and industrial properties. OED also works to assist businesses that locate in the RLF target area with the permitting process.

Click here for the Revolving Loan Fund map.
  • 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, including industries owned by minorities and women. 

  • To stimulate the redevelopment of under-utilized and deteriorated commercial and industrial property in Denver's RLF target area.
  • The applicant's project must be located within Denver's RLF target area.
  • A majority of the new or retained jobs 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. 

  • 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 RLF 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. 
  • The applicant needs to contact a Small Business Economic Development Specialist at OED to obtain additional information about the RLF Program, including the requirements for submitting an application for funding. If help is needed in preparing a loan application, the Specialist can refer the applicant to available technical resource centers for further assistance. 

  • After the applicant has assembled the necessary information for 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 RLF Program 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 a Small Business Economic Development Specialist at OED. 

  • The Small Business Economic Development Specialist 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, the Specialist will recommend the application to the loan review committee for approval. The loan approval process takes approximately two weeks after a completed loan application is received. 

  • Once the loan application has been approved for funding, the Specialist 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 additional four to six weeks.
For further information, please contact a Small Business Economic Development Specialist at 720.913.1999.

Neighborhood Business Revitalization (NBR)

Neighborhood Business Revitalization Loan (NBR) and Neighborhood Marketplace Initiative (NMI) Program
 
The NBR and NMI program works by assisting entrepreneurs in starting or expanding their businesses in targeted Denver neighborhoods. The Denver Office of Economic Development provides gap financing, technical assistance, permitting assistance and design consultation  to enhance investment opportunities in NBR and NMI target areas. Older business districts such as South Broadway, Santa Fe Drive, Highlands Square and others have experienced an economic renaissance as a result these Denver programs.
  • To stimulate the revitalization of older neighborhood commercial districts designated as NBR and NMI target areas by the City and County of Denver.
  • To provide economic opportunities in Denver for new and expanding neighborhood serving businesses, including minority and women owned businesses.
  • To enhance the quality and level of goods and services available in Denver's low and moderate income residential neighborhoods.
  • To create permanent jobs for low- and moderate-income Denver residents. 
  • The applicant's project must be located in one of Denver's targeted commercial districts: 
    • Downing Street - between 31st Avenue to 35th Avenue;  Bruce Randolph Avenue between Downing to York; York Street - between Bruce Randolph to 38th Avenue
    • East Colfax Avenue - between Broadway to Colorado Blvd.
    • Larimer Business Street District - between 20th Street to Park Avenue West
    • Morrison Road - between Knox Ct. to Sheridan Blvd. 
    • Santa Fe Drive - between Alameda Avenue to 13th Avenue
    • Welton Street - between 20th Street to 30th Street and Washington Street - between 24th Avenue to 26th Avenue
    • Berkeley/Tennyson Corridor (Tennyson Street between 38th Avenue to 45th Avenue
    • West 38th Avenue -  between Jason Street to Federal Boulevard
  • The applicant must provide goods or services to adjacent Denver residential neighborhoods, create permanent jobs for low- and moderate-income Denver residents, or assist in the elimination of slum and blight conditions in a targeted commercial district.
  • New equity and new private financing must be maximized, fully committed to the project, and account for at least 50% of total project costs. Facade improvement loans requiring lower levels of private participation may be available in selected districts.
  • The applicant must provide sufficient evidence that the amount of funds requested from the City is necessary for the project to succeed. This evidence must 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 are 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 refinancing of existing debt.
  • All projects must receive approval from the local design review committee for signage and exterior storefront design.
  • 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. 
  • The applicant needs to contact a Small Business Economic Development Specialist at OED to obtain additional information about the NBR and NMIProgram, including the requirements for submitting an application for funding. If help is needed in preparing a loan application, the Specialist can refer the applicant to available technical resource centers for further assistance.
  • After the applicant has assembled the necessary information for 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 NBR and NMI Program 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 NBR and NMI funding to a Small Business Economic Development Specialist, at OED.
  • The Small Business Economic Development Specialist 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 NBR and NMI Program, the Specialist will recommend the application to the loan review committee for approval. The loan approval process takes approximately two weeks after a completed loan application is received.
  • Once the loan application has been approved for funding, the Specialist 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 eight to ten weeks.
For further information, please contact a Small Business Economic Development Specialist at 720.913.1999.

More Loans & Information

Any of Denver's community development corporations (CDC), in partnership with the Small Business Administration (SBA), can provide below market rate, long-term financing on commercial and industrial fixed assets located in the City and County of Denver.

Eligibility

  • Owner occupied properties
  • Commercial and industrial businesses
  • New construction or rehabilitation (permanent financing)
  • New project costs (no refinancing)
  • Total costs up to $3 million
  • Corporate net worth under $6 million
  • Profit after tax under $2 million
  • Demonstrated repayment ability


Features

  • Low down payment (10%)
  • Fixed interest rate
  • Low interest rate
  • Twenty year amortization for real estate
  • Ten year amortization for capital equipment
  • No balloon payment
  • Loan origination fee averaging 3%
  • Loan approval in 30-60 days
  • Qualifying assumptions possible
  • Many soft costs eligible for financing
  • $35,000 from DUEDC/SBA for each new job created


Structure

  • 10% borrower equity
  • 40% CDC/SBA second deed of trust ($750,000 maximum)
  • 50% BANK/CHFA* first deed of trust

*In most instances, the Colorado Housing and Finance Authority (CHFA) will purchase a 90% participation in the first mortgage. Please check with CHFA on current interest rates and loan servicing fees.

For further information, please contact a Small Business Economic Development Specialist at 720-913-1999.

OED's Small Business Lending unit offers a variety of programs and services to help your company obtain the level of "gap" financing required to meet your needs.  

Below is a complete list of forms and/or required information that is to be submitted when applying for a RLF or NBR loan through OED.

Funding Sources for Entrepreneurs and Small Business

The Denver Office of Economic Development now offers an updated, third edition of the Denver Capital Matrix, a resource directory of funding sources for Denver small businesses and entrepreneurs. The matrix identifies approximately 400 funding sources, including traditional bank lending, venture capital firms, private equity firms, angel investors, mezzanine sources and others that have funded Colorado businesses. The matrix provides contact information and categorizes the investment focus of each listed organization.

View Denver Capital Matrix

The Create Denver Revolving Loan Fund (CDRLF) offers creative enterprises in the City and County ofDenver access to affordable and flexible business capital to increase income and build assets. Funded through Community Development Block Grant monies, the CDRLF supports Denver’s creative economy with small amounts of capital provided at reasonable rates, combined with recommendations for business improvements, resulting in the strengthening and stimulation of the creative sector.
 
Click here for more information on the Create Denver Revolving Loan Fund.
How much can I borrow from an RLF or NBR loan? 
“Gap” financing up to 25% of total project cost under the RLF loan program with a cap of $350,000. “Gap” financing up to 50% of total project cost under the NBR loan program.
 
What is the lending rate or what is it based on?  
RLF and NBR 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 and OED’s participation at a below market rate. 

How long do I have to repay a RLF or NBR loan?
The term of the loan can be from five to fifteen years depending on the use of the funding, but the loan can be amortized over a longer period of time.

How long does it take to process a loan?
Preliminary approval of an application usually takes two (2) 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 twelve (12) weeks. 

Can you refer me to a private financial institution to get the primary funding to complete the proposed project?
Private funding sources can come from banks (specifically banks you have relationships with), SBA guaranteed loans, Community Development Corporations, micro lenders, investors willing to invest capital and owner’s equity/contribution.  We encourage you to contact as many private lenders as necessary to secure their participation.   

Do I have to guarantee the loan?  How does Denver secure their loan?
All individuals who own at least 20% of the business will have to guarantee the loan.  In addition, the City will require the pledge of personal assets, if available, of all guarantor(s).  Denver normally takes a subordinated position to the participating bank on all business assets.

What are the important criteria you require to have a loan approval?

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, other economic development factors, etc.).    

Financing Under 50K?

For financing needs under $50,000, the best option may be to get in touch with a variety of local micro lenders through the Colorado Microfinance Alliance.

Contact Us

Contact OED’s Small Business Lending Group at 720.913.1999 for more information.
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