Minnesota small business grants, loans and training funds (2026)

Sorting Minnesota’s offers by who holds the money

Before you apply anywhere, match the program to the party that controls the decision:

• Your lender decides; DEED backs the loan. The Minnesota Loan Guarantee Program and the Small Business Loan Participation Program work only through enrolled banks, credit unions, CDFIs and nonprofit lenders ⁠¹.
• DEED lends directly at 1%. The Automation Loan Participation Program and the Growth Loan Fund ⁠¹.
• A nonprofit partner decides on a grant. PROMISE Act grants are run by seven regional organizations, not by DEED ⁠⁶.
• DEED reimburses costs you already paid. Training grants from the Minnesota Job Skills Partnership (MJSP) and the STEP export grant ⁠⁷⁠¹⁰.
• Investors decide. Two SSBCI venture capital programs managed by the University of Minnesota ⁠¹.

DEED’s six SSBCI programs, from bank guarantees to venture checks

Treasury approved Minnesota for up to $97 million under the 2021 State Small Business Credit Initiative, its second round after $15 million in 2010. The money arrives in three disbursements; DEED’s first was about $29.5 million ⁠¹.

Scroll the table sideways to see every column.

The guarantee program is the one most owners can use. Startup costs, working capital, equipment, inventory and an owner-occupied place of business are all eligible uses; passive real estate and goodwill are not ⁠². Funds target businesses with fewer than 500 employees, counting all locations. The lender sets the rate, term and collateral, and must enroll the loan with DEED before closing. Term loans are guaranteed for the shorter of the loan term or ten years, and lines of credit for no more than three years. A loan enrolled here cannot serve the same purpose as an SBA 7(a), SBA 504 or USDA loan ⁠². On fees, DEED’s overview lists 0.25% of the guarantee amount, while its lender section on the same page still says 2%. Both versions waive the fee for businesses owned by socially and economically disadvantaged individuals and for loans under one year, so ask your lender which rate it is charging ⁠².

The Growth Loan Fund is only for technology and innovation companies. A business must be certified for the Angel Tax Credit or have been identified for investment by a venture or angel fund or an accredited investor. It enrolls before raising, then has 12 months to raise at least 70% of its stated goal. DEED’s page sets the minimum raise at $400,000. The loan carries 1% interest over seven years, principal payments start in year four, the balance is due as a balloon payment at maturity, and a sale of the company triggers repayment plus 10% of the original loan ⁠³.

PROMISE Act grants: real cash, narrow eligibility

The PROMISE Act Grant Program is Minnesota’s only current state grant that an ordinary storefront can spend on payroll, rent, utilities or equipment. It is limited to businesses in designated areas and to those with $750,000 or less in prior-year gross revenue ⁠⁶.

The law routes the money through named partners: the Neighborhood Development Center (North and South Minneapolis corridors, St. Paul neighborhoods and the seven-county metro suburbs), and the six Minnesota Initiative Foundations, including the Northland Foundation, which together cover Greater Minnesota ⁠⁶. Each partner opens its own portal and sets its own dates. Preference goes to businesses that received $10,000 or less from earlier state relief programs such as the Minnesota Small Business Relief Grants and to those whose prior-year revenue fell 10% or whose net income declined ⁠⁶.

The odds are long. Round 1 drew 6,445 applications and funded 929 businesses, totaling $16,312,000. Round 2 opened in August 2025, and by March 5, 2026, total awards across both rounds had reached $22,263,433 to 1,235 businesses ⁠⁶. A business can receive only one grant. Since 2025, a home-based business must have claimed the home office deduction in the prior tax year. Partners must spend their money by June 30, 2027 ⁠⁶.

Launch Minnesota is gone: what tech founders can still use

Through fiscal 2025, Launch Minnesota paid Business Operations grants of up to $35,000 with a 1:1 match. It also matched federal SBIR/STTR awards with up to $35,000 for Phase 1 and $50,000 for Phase 2. DEED’s January 2026 report confirms that funding was discontinued at the end of fiscal 2025, and the program no longer offers Innovation Grants ⁠⁵. Over its six years it awarded $9.7 million in 383 grants to 287 companies ⁠⁵.

Any site still advertising Launch Minnesota grants or a Minnesota SBIR match is out of date. What remains for technology firms is the Growth Loan Fund, the University of Minnesota’s SSBCI venture programs ⁠¹⁠³, and federal SBIR/STTR awards themselves. DEED notes that those federal awards go to established firms with fundable research, not to brand-new startups ⁠⁴. Launch’s match required registration with the SBIR/STTR Catalyst program of MNSBIR, Inc., a nonprofit that works with Minnesota firms on federal proposals ⁠⁵.

Training money through the Minnesota Job Skills Partnership

MJSP grants offset training-related expenses only; they are not operating money ⁠⁷.

• Job Training Incentive Program (JTIP). Up to $200,000 for a new or expanding business outside the seven-county metro (or in Cannon Falls, Hanover, Rockford, Northfield or New Prague) that adds at least three jobs. Each job must pay at least $39,600 a year in 2026, which is 120% of the poverty guideline for a family of four, and must offer at least 32 hours a week for nine months a year. The business matches 50 cents per grant dollar. Applications are accepted year-round, and DEED aims to decide within 15 days ⁠⁸.
• Automation Training Incentive Program. Up to $35,000 for small manufacturers or skilled-production businesses in the same Greater Minnesota area that are installing new automation technology, to train existing full-time workers earning at least $39,600 ⁠⁹.
• Partnership Program. Up to $500,000, paid to an accredited Minnesota college that builds custom training with you. The Pathways Program offers the same maximum for training aimed at low-income workers ⁠⁷.

Export, farm-processing and job-creation grants

STEP. The Minnesota Trade Office has about $300,000 for the program year ending June 30, 2027. It pays out as applications are approved, so the money can run out early ⁠¹⁰. It reimburses 50% of pre-approved costs such as trade shows, trade missions, Gold Key matchmaking, website translation and CE marking, up to $7,500, plus up to $500 for export training with no match. To qualify, you need at least one year in operation, SBA small-business status, an export plan, and more than 50% of the product’s value made in Minnesota. Activities cannot start before the grant contract is signed ⁠¹⁰.

AGRI Value-Added and MPEM grants. In 2026, the Minnesota Department of Agriculture offered up to $2.25 million in reimbursement grants of $1,000 to $150,000, with a cash match, for processing equipment. Applications closed June 17, 2026 ⁠¹¹.

Job Creation Fund. This is a performance incentive for expansions, not a startup grant. You must invest at least $500,000 in real property and create 10 jobs ($250,000 and 5 jobs for targeted populations), have a location option outside Minnesota, and apply through your city or county before the project starts. Payments of $1,000 to $5,000 per job per year, plus a 5% (metro) or 7.5% (Greater Minnesota) rebate on property improvements, arrive only after you prove performance ⁠¹².

Mission lenders for owners banks turn down

DEED’s Emerging Entrepreneur Loan Program funds certified nonprofit lenders that lend to businesses majority-owned by minorities, low-income persons, women, veterans or people with disabilities. The state share is $5,000 to $150,000, matched at least 1:1 by private financing. Beginning microenterprises can borrow $5,000 to $40,000 statewide, or up to $55,000 in low-income areas, with no match. Rates are capped at prime plus 2%, with a 10% ceiling ⁠¹³.

In Minneapolis, the city’s Two Percent Loan matches a private lender’s loan for building improvements and equipment: up to $75,000 citywide, $100,000 in Great Streets areas and $125,000 in priority or cultural districts. It carries 2% interest, a 1% origination fee ($150 minimum) and a term of up to 10 years, for businesses with 20 or fewer full-time employees ⁠¹⁴.

Working through a Minnesota SBDC and DEED, step by step

1. Open an SBDC file first

   Sign up on the Minnesota SBDC portal and choose your regional center (there are nine). Counseling is free for SBA-size businesses and for people still planning one. Bring a draft business plan, because the SBDC asks for one ⁠¹⁵.

2. Decide which kind of help fits

   Use the sorting list above. If you need credit, ask the SBDC consultant to help package the loan.

3. Find an enrolled lender

   Open the lender directory for the Loan Guarantee or Loan Participation program. Ask the lender to enroll your loan with DEED before closing, because loans closed earlier are ineligible ⁠².

4. Check PROMISE Act eligibility by address

   Confirm your location falls in a partner’s service area and pull last year’s return. Your revenue tier is set by prior-year gross revenue, and home-based owners need proof of the home office deduction ⁠⁶.

5. Line up training or export money before you spend

   Call MJSP (651-259-7514) about JTIP or the automation grant, or apply to STEP well before a trade show. Neither program reimburses costs incurred before approval ⁠⁷⁠¹⁰.

6. For expansions, start at city hall

   Job Creation Fund projects begin with a local government resolution ⁠¹².

7. If you are turned down, change channels

   A lender’s credit denial can go to another enrolled lender or an Emerging Entrepreneur lender ⁠¹³. A business that already received a PROMISE grant cannot apply again ⁠⁶.

Compare other states on the small business grants hub.