While a record number of jobless claims continues to pour in across Minnesota, small business owners who don’t qualify for unemployment benefits are still trying to stay afloat.
In response, Gov. Tim Walz on Monday afternoon signed an executive order authorizing the Minnesota Department of Employment and Economic Development (DEED) to create an emergency loan program to help Minnesota small business owners who need immediate help.
“Over the past week, we have heard from many small businesses in Minnesota that are facing significant challenges as a result of the COVID-19 crisis,” Walz said in a prepared statement, referring to small businesses as the backbone of communities. “Now more than ever, we are looking for creative solutions like DEED’s Emergency Loan Program to help them get through these extremely difficult times.”
The loan program is intended to help any small business closed temporarily under last week’s executive order that called for in-person meals to be closed at restaurants and bars, as well as other small businesses whose owners may not. not have sufficient liquidity to withstand a temporary shutdown. .
It accesses $ 30 million in special income funds, according to DEED commissioner Steve Grove, and will allow small businesses to apply for loans ranging from $ 2,500 to $ 35,000. The loans will be repayable at 50 percent and offered at an interest rate of 0 percent.
It also allows local government units to provide loans to retailers and service providers for the next 90 days. DEED estimates that up to $ 28 million in capital could be accessed through local revolving loan funds and local governments through this action.
That’s up to $ 58 million available for small businesses across Minnesota.
“We know that small businesses and independent contractors are among the hardest hit by the COVID-19 crisis,” Grove said. “We think this is an important thing to do to help small businesses access new funds during these difficult times. “
Additionally, small businesses in Minnesota are eligible for disaster loans according to the US Small Business Administration (SBA). The loan program offers low-interest loans of up to $ 2 million to small businesses and offers long-term repayment options, up to a maximum of 30 years. You can get more information about this at www.sba.gov.
While this is helpful, Walz and Grove agreed that federal loan programs are not moving fast enough and acknowledged that small businesses in Minnesota need help now.
“It helps these small businesses with an emergency loan,” Walz said. “We think it will be a bridge to help people get through the next few weeks. “
In total, DEED estimates that the loans offered to small businesses through this loan program will help between 1,200 and 5,000 small businesses across Minnesota.
More information on how to apply will be available later this week at www.mn.gov/acte.
That said, Grove also encouraged all small businesses in Minnesota to apply for a disaster loan through the SBA.
“It’s critical that we take advantage of every federal dollar we can,” Grove said. “This program will help close that gap while that money arrives and help small businesses get more immediate relief.”