Second Mortgage Program

Companies operating in the city of Milwaukee have a strong partner in the Milwaukee Economic Development Corporation. Working with conventional lenders, MEDC offers low interest financing to businesses and entrepreneurs for projects that create new employment opportunities, retain jobs, and stabilize neighborhoods.

MEDC shares the financing risk with participating lenders and borrowers. With a minimum of 10% equity from the borrower, MEDC will finance up to 40% of the total project costs, and the conventional lender finances 50% of the project costs. MEDC will lend up to $500,000 per borrower.

Taverns, liquor stores, and gun shops are not eligible for financing.

Lending Structure
A typical project is usually funded:

Lender Financing $400,000 50%
MEDC Financing $320,000 40%
Borrower Equity $80,000 10%
Total Project $800,000 100%

Lending Criteria

  • Business must be located in the City of Milwaukee
  • Project must create or retain jobs
  • Project involves one or more of the following: land and building purchases, new construction, renovations, or equipment purchases
  • Limited working capital financing may be provided if fixed assets are a part of the total project
  • Real estate projects require 50% owner occupancy

Loan Terms

  • Loan amortization is based on the useful life of the assets up to 20 years, and matches the term of the participating lender
  • Fixed interest rates are set at the time of loan approval, and are below current market rates
  • Personal guarantees of owners are required
  • The guarantee of operating business is required
  • The participating lender will receive a first mortgage on project assets for its portion of the project financing, and MEDC takes a subordinated second position on its portion
  • No prepayment penalty
  • Borrowers must pay MEDC attorney fees of approximately $3,000 to $3,500 for loan closing costs and document preparation




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