Duluth 1200 Fund Gap Financing



The Duluth 1200 Fund provides incentive loans for business expansions and relocations within the City of Duluth, which will create new jobs. Loans will be made to eligible businesses to create the inducement necessary to structure financial packages to support business growth.  Bank participation and business owner equity are both required to be part of the financial package supporting a business’s growth.  A loan from the Duluth 1200 Fund is intended to address a gap in the financial package, not replace business owner equity contributions or traditional bank lending.

Incentive and Financial Resource Programs

Adam Fulton

402 City Hall , Duluth, MN 55802





General Loan Program




Loan Amounts: maximum of $500,000.

Eligible Applicants: This program is directed toward existing businesses, which have been in operation three or more years. New business start-ups are not normally eligible.

Other Funding Sources are Required: Typically a minimum ratio of two private dollars to one Duluth 1200 Fund dollar will apply. A bank loan will be required for an amount at least equal to the Duluth 1200 Fund Loan. Personal guarantees may be required for privately held corporations.

Other Special Requirements: Loans may not exceed $10,000 per job created. Business must be located in the City of Duluth.

Allowable Use of Proceeds: Low interest financing for up to 1/3 of the total cost of the project is available to service (non-personal and non-retail), wholesale, and manufacturing businesses uses.  Loans are not available to legal, architectural or financial services businesses, non-profits or retail (restaurant or retail shops).

Term of Loan: This program provides fixed rate financing for fixed assets (building) for a term of up to 17 years and machinery and equipment for a term of up to seven years and working capital for a term of up to five years.

Interest Rate: The interest rate varies but typically between 3% and 8%.

Business Participants





Advance Loan Program


The Advance Loan Program provides gap financing for Duluth business start-ups city wide.  Loan must be utilized to purchase and make improvements in existing real estate building that will house the new business.

Loan amount: maximum of $50,000

Term of loan: Up to 17 years

Other special requirements: Unlike the General Loan Program, there is no requirement related to creation or retention of job and the business can be retail in nature.  A bank loan and owner equity must be included in the project financing package.

Loan forgiveness: Up to 50% of the loan may be forgiven if two full-time or full-time equivalent jobs are created on the site within the first two years of operation.

Business Participants


West Theater Center for the Arts