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Grow Minnesota!'s guide to business funding


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Business funding

The key for any successful initiative

Access to external capital is vital for the growth and development of businesses and the economy in Minnesota. It provides the necessary financial resources to innovate, expand operations, create jobs and drive economic growth beyond what internal resources alone can achieve.

However, navigating the complex landscape of business funding can be daunting, whether you’re an aspiring entrepreneur with a groundbreaking idea, a small business owner looking to expand or a seasoned company seeking to finance your next growth phase.

Grow Minnesota!’s Guide to Business Funding aims to simplify the process by providing guidance on how to access different financial solutions in Minnesota, insights on when to access them and where to find support through the process.

About Grow Minnesota!

Grow Minnesota! is the Minnesota Chamber’s premier economic development program focused on retaining and growing Minnesota businesses. Our staff helps businesses overcome challenges, make new connections and grow — in any part of the state. The team meets with businesses around the state to discuss plans or walk through resources.

When you meet with the Grow Minnesota! team for assistance, we:

  • Walk you through resources in this guide,
  • Determine what resources fit your business,
  • Introduce you to the next steps and connect you with the right people to get started.

If you would like one-on-one assistance, please contact the Grow Minnesota! team at or 651-292-4650.



Private-sector funders
Private-sector funders
» Banks/traditional lenders

» Online lenders

» Private equity

» Crowdfunding platforms

» Angel investors

» Venture capital
Nonprofit lenders
Nonprofit lenders
» Community development financial institutions (CDFIs)

» Minnesota Initiative Foundations (CDFIs covering each region in Greater Minnesota)

» Other nonprofit lenders/CDCs
Government agencies
Government agencies
» Minnesota Department of Employment and Economic Development (DEED)

» Small Business Administration (SBA)

» Other state and federal agencies

» City and county economic development agencies



The “business growth cycle” serves as a framework to define the four stages of business growth from its inception to maturity. These stages are flexible, non-linear and can be influenced by various factors. As a business progresses through these stages, its funding requirements also evolve. Tailored financial strategies align with each stage’s unique growth objectives and market dynamics.

1. Startup
For startups, obtaining capital can be difficult because they lack financial history and are considered riskier. However, starting a business can be relatively inexpensive, depending on the capital intensity of the industry and the firm’s operations. Entrepreneurs often rely on personal savings, angel investors, or support from friends, family, governments or nonprofits to acquire this capital. SBA 7(a) loans and traditional financing can be sources of capital for many new businesses. Venture capital may also be a source of capital for startups with high growth potential and innovative products.

2. Growth
Businesses on a growth trajectory often require external capital to fuel their expansion plans. During the early stages, SBA loans can be a good lending source, with traditional financing options becoming more easily accessible after the company has demonstrated two to three years of steady cash flow. Asset-based lending is a prevalent financing option for companies with high-value goods. Alternatively, equity financing provides access to substantial funds, expertise, and valuable connections.

3. Maturity
A stable, established business with a strong market presence has greater access to a wide range of equity and debt financing tools.

4. Decline or renewal stage
In this phase, companies may require capital for various reasons, such as restructuring, rebranding, or launching new product lines to regain their market position. In addition, financing may be necessary for diversification into new markets or industries, as well as for addressing financial challenges and managing debt to turn around the business’s performance. Depending on the company’s health and trajectory, it may adopt different financing strategies from the previous three stages.


Funding network

Businesses benefit from establishing a diverse network of capital providers due to the varying financial needs they encounter throughout their growth journey. Relying on a single source of capital can be risky, especially as a business evolves. By cultivating relationships with various capital providers such as traditional lenders, angel investors, venture capitalists, government and nonprofit business support programs, and crowdfunding platforms, businesses can access various funding options tailored to different stages, sizes and purposes.



Private sector funders

Banks/traditional lenders
Banks and other conventional lenders are financial institutions that provide a range of financial services, including loans, credit lines and financing, to individuals and businesses. They usually have thorough lending criteria and application processes that assess creditworthiness, collateral and repayment capability. Although obtaining financing from banks can be challenging for startups and businesses with limited financial history or higher risk profiles, businesses can benefit from traditional lenders by receiving stable, dependable funding and the opportunity to establish a long-term banking relationship.

private sector


grants and taxes

Minnesota offers a range of business grants and tax credits that encourage certain kinds of activities that benefit the public.

Below are grant and tax credit programs to support workforce training and hiring activities, business expansion projects, entrepreneurship and innovation, exporting and sustainability.

For assistance navigating these programs or identifying additional grants, tax credits or loan programs, contact our Grow Minnesota! team for a free one-on-one consultation.

Quick tip: Businesses should beware of advertisements or marketing emails that promise grants to start a business or for general business purposes. Business grant programs are rare and usually are narrowly focused to incentivize specific kinds of activities that are in the public interest.



Need more assistance?

Need more assistance?

The Grow Minnesota! team at the Minnesota Chamber of Commerce can provide additional assistance to help your business access the above resources.

Contact for more assistance.