Small Cap TIF Business Loan Program

Madison Development Corporation has forgivable loan funds available for growing businesses in the City of Madison's TID Districts. MDC will make recommendations to the City of Madison to lend up to $250,000 to qualifying businesses for the purpose of purchasing real estate or financing real estate improvements.

Eligibility

Eligible Borrowers (Qualifying Businesses)

  • Businesses located within, or within a half-mile of, specific City of Madison Tax Increment Districts (TID) for which funding has been allocated. In 2026, these are Tax Increment Districts: 44, 46, 51, 52, 54, 56, and 57. Contact MMiller2@cityofmadison.com or lending@mdcorp.org to confirm your business is within the mapped boundaries. 
  • In order to be eligible for loans through the Small Cap TIF Loan Program, a business must have between 5 and 100 full-time employees (or part-time employees equivalent to at least 5 full-time employees). Business owners and partners who actively work at the business and are included in the business' payroll count as employees for this requirement.
  • Businesses who intend to stay within the TID Districts for at least 5 years
  • Business must be a for-profit entity

Ineligible Borrowers (Nonqualifying Businesses)

  • Lending and investment institutions
  • Insurance companies
  • Golf courses, racetracks or gambling facilities
  • Non-for-profit entities
  • Businesses engaged in any illegal activity per local, state, or federal regulations with federal regulations taking precedence over local or state regulations.
  • Home-based businesses

Loan Amounts

  • Loans up to $250,000 for real estate purchase, improvement, remodeling or expansion

Loan Rates and Fees

  • 0% interest for 5-year Term of the Loan
  • Loan Balance to be decreased by 20% each year the Borrower is located and operates within the TID District, and will be fully forgiven at the end of the 5 years from the date that the City's adopted the Loan Authorization Resolution
  • There are no closing fees on the Loan paid by the Borrower.

Loan Terms

  • The loan applicant must be the owner or purchaser of the real estate held as collateral. If a business is seeking funding for leasehold improvements, the property owner, not the leasehold tenant, must submit the application.
  • City will take the most mortgage security interest practicable in real estate to secure the Loan
  • A personal guarantee is required of all principals with 20% or more interest in business
  • Equity requirement for existing businesses (10% of the total borrowing need) and 20% for start-up businesses

Credit Standards

The presentation of loan requests will include at minimum the following documentation:

  • A statement of the purpose of the loan and the use of funds
  • A brief history of the cooperative
  • Brief bios of Board members and key staff people.
  • Financial Statements for the last three years consisting of:
    • Balance Sheet
    • Income Statement
    • Applicable Footnotes
    • Interim Financial Statements
  • A schedule of existing debt and a valuation of available collateral
  • An aging of accounts receivable and accounts payable
  • Projections of income/expense and cash flow of the proposed project
  • A statement of the job retention and creation

In addition to the above documentation, the presentation will include a summary of the analysis of the proposal detailing key ratios such as debt to net worth, current ratio, debt coverage, and any irregularities in the business's performance and profitability over time and in comparison to industry standards.

Final loan approval to be provided by the City of Madison's Common Council, who will be presented a synopsis of the credit analysis and recommendation. Loans must comply with goals and TIF Law; no working capital nor loans for operating costs will be provided under this program.

How to Apply

Contact Madison Development Corporation, 550 W Washington Avenue, Madison WI 53703, lending@mdcorp.org, 608-455-0320.

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