About the Fund

As cities and counties throughout Minnesota face the reality of having fewer resources in the future for everything from police and fire services to parks and libraries, dozens of local governments, nonprofit economic development groups, and regional & local utilities from all around Greater Minnesota have banded together to establish an innovative new economic development financing organization--the Minnesota Community Capital Fund (MCCF).

Forty-eight MCCF charter members participated in the organizational meeting of the Fund on February 5, 2003 in St. Cloud to formally launch this unique nonprofit lending corporation and elect its first board of directors.

The Northland Institute, a nonprofit organization, developed MCCF over a two-year period, and is currently managing the Fund. Scott Martin, Northland's President and MCCF CEO, explained, "MCCF is a rural economic development initiative of the Institute that was designed to increase the availability of gap-financing capital for businesses located in rural communities through the pooling of local dollars and by accessing national capital markets".

"The Fund originates loans on behalf of its members and sells all loans to a specialized community development secondary market. By selling our loans on an advance commitment basis, MCCF recapitalizes its loan fund immediately following each loan closing. This approach ensures that MCCF always has money to lend in the communities we serve."

In order to accommodate rural development organizations and local governments of all sizes, MCCF memberships continue to be offered at levels ranging from as low as $25,000, up to a maximum of $250,000. This approach has allowed very small communities such as Buhl (pop. 983), Warroad (pop. 1722), and Chatfield (pop. 2394) to enjoy the same access to capital and professional lending services as much larger cities like Duluth, Winona, and St. Cloud. Regardless of the level of membership, MCCF members enjoy all of the same benefits and are able to originate loans of up to 10 times the amount of funds they have on deposit in the loan fund.

Applications are accepted for subordinated business loans ranging from $50,000 to $2,500,000. "Since MCCF is a gap lending source, all of our loans will be made in conjunction with local financial institutions and other economic development lenders as part of the total financing package," explained Martin. "Our goal is to be responsive to the needs of borrowers and other project lenders by offering competitive pricing, outstanding customer service, and the flexibility to get the deal done."