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CORRESP
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Paul D. Chestovich

Direct Dial: (612) 672-8305

Direct Fax: (612) 642-8305

paul.chestovich@maslon.com

July 8, 2016

VIA
EDGAR

Ms. Megan Miller

Staff Accountant

U.S. Securities and Exchange Commission

Division of Investment Management,
Disclosure and Review Office

3 World Financial Center

New York, NY 10281

    Re:
    Mill
                                         City Ventures III, Ltd. (the “Company”)

        Annual
        Report on Form 10-K for the year ended December 31, 2015

        (and
        other filings)

Dear Ms. Miller:

This letter responds on behalf of the
Company to your comments via conference call on May 26, 2016, with respect to above-referenced filings made by the Company with
the Commission. To facilitate your review, we have included in this letter your original comments (in bold) followed by our responses.

Form 40-17G

 1. It was noted that the form
                                         was filed on April 14, 2014 and that provided coverage through March 17, 2015 and there
                                         was a form that was filed on April 4, 2016 which provided coverage through March 25,
                                         2017. It appears that the filing was not done for coverage through March 2016. So can
                                         you please explain why and file any missing forms to ensure there was not lapse in coverage.

RESPONSE: We have reviewed our files and confirm that no fidelity
bond filing was made evidencing coverage through March 2016. This was an oversight by the Company and was noted to the Company’s
Board of Directors in the most recent compliance meeting and written compliance memorandum delivered to the board by the Company’s
Chief Compliance Officer. In this regard, the Chief Compliance Officer has taken steps to update the Company’s compliance
calendar (part of its compliance manual) to ensure this oversight does not recur. Nonetheless, the oversight was limited to the
filing of the fidelity bond and related materials under EDGAR Form 40-17G – we can confirm to you that a fidelity bond with
the appropriate statutorily mandated amount of coverage was in fact purchased and in place providing coverage from March 17, 2015
through March 17, 2016. The policy was procured by the Company on March 6, 2015 through Hays Companies (as broker) and issued
by Federal Insurance Company (an affiliate of Chubb) (i.e., the same broker and insurer as those reflected in the Form 40-17G
fillings made on April 14, 2014 and on April 4, 2016).

It appears from your comment that you would prefer we remedy this
oversight by filing a Form 40-17G that attaches the appropriate material for the fidelity policy in place from March 17, 2015
through March 17, 2016, and so we are making that filing contemporaneously with our submission of this response letter.

Ms. Megan Miller

Staff Accountant

Securities and Exchange Commission

Page 2

July 8, 2016

Audit Opinion

 2. The audit opinion does not
                                         state that the auditors confirmed the investments held. Please confirm to the staff if
                                         there was a confirmation of investments, as required under the 2015 Audit Guide, Section
                                         11.35, as well as guidance available on the SEC website.

RESPONSE: We have discussed this comment with the Company’s
independent registered public accounting firm. In our discussion and correspondence with them, they confirmed to us that their
audit procedures for both 2015 and 2014 included a confirmation of the Company’s investments as required under Section 11.35
of the 2015 Audit Guide. They have advised us that, in the Company’s future filings, their audit opinion will affirmatively
state that they audited the Company’s financial statements, including the schedule of investments, and that their audit
procedures included a confirmation of investments held by the Company.

Schedule of Investments

 3. Include the disclosure requirements
                                         of Article 12-12 of Regulation S-X, footnote 8. That footnote requires disclosure of
                                         the amounts, based on costs for federal income-tax purposes, of four separate items.

RESPONSE: We have reviewed the requirements described in footnote
of Article 12-12 (“Investments in Securities of Unaffiliated Issuers”), and will include these disclosures in our
future periodic reports filed with the Commission.

 4. Page 4 of Form 10-K states
                                         that the fund will invest in first lien, second lien and unsecured debt. The Schedule
                                         of Investments states only that the fund has promissory notes. Is the classification
                                         on the Schedule of Investments correct? And are there interest rates associated with
                                         the loans.

RESPONSE: The classification on the Schedule of Investments is
correct, but we will undertake in the Schedules of Investments included in our future periodic reports filed with the Commission
to be more detailed and specific in the description of investments on the Schedule of Investments (e.g., instead of disclosing
“promissory note,” we will in future filings disclose “secured promissory note, first lien on substantially
all assets of the issuer” or similar, as appropriate for each investment).

 5. Do
                                         any of the loans contain PIK? If so, please identify in the Schedule of Investments going
                                         forward.

RESPONSE: Upon review, only one of the investments included on
the Schedule of Investments as at December 31, 2015 contained features under which interest was payable in-kind, or “PIK.”
That investment was the secured promissory note held by the Company and issued by Creative Realities, Inc., under which 2% per
annum of the principal amount of the note accrues and pays interest through the addition of principal to the note. In future filings,
we will specifically identify investments with PIK features in our Schedule of Investments.

Ms. Megan Miller

Staff Accountant

Securities and Exchange Commission

Page 3

July 8, 2016

 6. The Schedule of Investments
                                         as at December 31, 2014 should be included in the 2015 Annual Report on Form 10-K together
                                         with the Schedule of Investments as at December 31, 2015.

RESPONSE: We understand your comment and we will ensure that a
Schedule of Investments will be included for all periods contained in our next Annual Report on Form 10-K. We also understand
that you may, after review of our responses in this letter, suggest or require that we file an amendment to our 2015 Annual Report
on Form 10-K to include a Schedule of Investments as at December 31, 2014. We will await further communication from you on this
issue.

 7. Instruction 1(b) to Item
                                         8.6.c of Form N-2 requires that a BDC should provide an indication in a Schedule of Investment
                                         of those investments that are not “qualifying” under Section 55(a) of the
                                         Investment Company Act of 1940, and in a footnote briefly explain the significance of
                                         non-qualification. The current disclosure identifies the qualifying assets. So going
                                         forward, please include the percentage of securities that were non-qualifying.

RESPONSE: We understand the comment and undertake to include this
disclosure in the Schedules of Investments included in our future periodic reports filed with the Commission.

 8. Please provide the expiration
                                         date for the warrants listed on the Schedule of Investments.

RESPONSE: We understand the comment and undertake to include this
disclosure in the Schedules of Investments included in our future periodic reports filed with the Commission.

 9. Please explain why a number
                                         of the common stock holdings have no cost identified. (i.e., Creative Realities, Inc.
                                         and Mix 1 Life, Inc.)

RESPONSE: In those instances where no cost is indicated for a common
stock holding, there is in fact no cost associated with the holding. So for example, the Creative Realities, Inc. common stock
was obtained through an exchange transaction in which the Company surrendered an out-of-the-money warrant; and the Mix 1 Life,
Inc. common stock was obtained through the cashless conversion/exercise of a warrant.

 10. Please provide one Schedule
                                         of Investments that is compliant with Article 12-12 of Regulation S-X, as opposed to
                                         presenting two Schedules of Investments.

RESPONSE: We understand the comment, and will in our future periodic
reports filed with the Commission include only one Schedule of Investments that is compliant with Article 12-12 of Regulation
S-X.

Ms. Megan Miller

Staff Accountant

Securities and Exchange Commission

Page 4

July 8, 2016

Balance Sheet

 11. Please include a line item
                                         for commitments and contingencies with no amount, and make a parenthetical reference
                                         to note 3 in the notes to financial statements. For reference, please see Article 6-04
                                         of Regulation S-X.

RESPONSE: We understand the comment, and will in our future periodic
reports filed with the Commission include such a line item in our balance sheet presentation.

 12. Is any portion of the cash
                                         balance restricted? If so, please ensure that it is separately stated.

RESPONSE: No portion of the Company’s cash balance is restricted.

 13. The balance sheet must
                                         be compliant with Article 6-04 of Regulation S-X. In particular, the balance sheet must
                                         present net assets applicable to outstanding units of capital and state the net asset
                                         value per share.

RESPONSE: We have discussed this comment with the Company’s
independent registered public accounting firm, and will in our future periodic reports filed with the Commission include the referenced
information in our balance sheet and otherwise ensure that the balance sheet presentation complies with Article 6-04.

Statement of Operation

 14. We noted in Part II, Item
                                         7, of the Annual Report on Form 10-K that the reporting entity earned $32,500 in loan
                                         origination fees which was approximately 5.7% of total income. Under Article 6-08.1 of
                                         Regulation S-X, this amount should also be broken out separately on the statement of
                                         operations.

RESPONSE: We have discussed this comment with the Company’s
independent registered public accounting firm, and will in our future periodic reports filed with the Commission include the referenced
information in our statement of operations.

Statement of Shareholders’ Equity

 15. The statement of shareholders’
                                         equity must conform to the requirements of Article 6-09 of Regulation S-X. Please update
                                         in future filings.

RESPONSE: We have discussed this comment with the Company’s
independent registered public accounting firm, and will in our future periodic reports filed with the Commission ensure that the
statement of shareholders’ equity presentation complies with Article 6-09.

Ms. Megan Miller

Staff Accountant

Securities and Exchange Commission

Page 5

July 8, 2016

Financial Highlights

 16. Please explain why there
                                         is only one year of financial highlights presented, as opposed to five years. In the
                                         financial highlights section, please include the ratio of expenses to average net assets
                                         in your future filings. Please refer to the Audit Guide.

RESPONSE: After discussion with the Company’s independent
registered public accounting firm, it appears to us that the inclusion of only one year of financial highlights was an error.
We propose to correct this error in our future filings with the Commission.

Notes to Financials

 17. Please explain why the
                                         Level 3 investments in the fair value hierarchy table do not tie to the reconciliation
                                         of Level 3 investments.

RESPONSE: Upon review, it appears that the reconciliation of Level
3 investments, found on page 37 of the Annual Report on Form 10-K, contains a calculation error, and should read $4,160,258, which
figure is correctly set forth in the fair value hierarchy on the same page (immediately above the reconciliation). The reconciliation
table shows a total Level 3 fair value at December 31, 2015 that is $5,195 too large. While an error in the presentation, we believe
this error is not sufficiently material to merit an amendment to the report.

 18. We noted that certain disclosure
                                         requirements of ASC 820 were not included. In particular, the following was missing (please
                                         refer to ASC 820-10-50-1 and ASC 820-10-50-2):

 (a) a description of the
                                         valuation techniques used for Level 3 investments; and

 (b) the inputs used to
                                         develop those measurements; and

 (c) if there was a change
                                         in any of the valuation techniques during the period.

RESPONSE: We have discussed this comment with the Company’s
independent registered public accounting firm, and will in our future periodic reports filed with the Commission ensure that the
financial statement footnotes contain the required ASC 820 disclosures.

 19. The definition of the “asset
                                         coverage ratio” on page 41 of the Annual Report on Form 10-K is incorrect and should
                                         be corrected in future reports. The correct calculation is total liability less assets
                                         not represented by senior securities over senior securities.

Ms. Megan Miller

Staff Accountant

Securities and Exchange Commission

Page 6

July 8, 2016

RESPONSE: We understand the comment, and will in our future periodic
reports filed with the Commission provide a corrected and accurate definition of the “asset coverage ratio” concept.

* * * * *

As requested in our conference call,
the Company hereby acknowledges as follows:

 [1] the Company is responsible for
                                         the adequacy and accuracy of the disclosure in the Company’s filings;

 [2] staff comments or changes to
                                         disclosure in response to staff comments do not foreclose the Commission from taking
                                         any action with respect to the filing; and

 [3] the Company may not assert staff
                                         comments as a defense in any proceeding initiated by the Commission or any person under
                                         the federal securities laws of the United States.

Should you have additional comments
or questions, please direct them to the undersigned by telephone at (612) 672-8305, by f