Is developing more minority-owned businesses the 'secret sauce' to MN prosperity? Bill would boost efforts

A total of $18 million in the upcoming biennium could fund development grants for minority-owned businesses around the state.

The money — $15 million in Fiscal Year 2020 and $3 million in Fiscal Year 2021 — would be appropriated to the Department of Employment and Economic Development for grants to nonprofit minority business development organizations that would provide lending capital, access to markets, and business management education to minority-owned businesses.

Sponsored by Rep. Tim Mahoney (DFL-St. Paul), HF2138 was laid over late Wednesday by the House Jobs and Economic Development Finance Division for possible omnibus bill inclusion. The companion, SF2244, is sponsored by Sen. Bobby Joe Champion (DFL-Mpls) and awaits action by the Senate Jobs and Economic Growth Finance and Policy Committee.

The bill would earmark $12 million of the $15 million provided in Fiscal Year 2020 for creating revolving loan funds to provide capital to minority-owned businesses, while the remainder would be for operating support of the nonprofit organizations providing the business assistance services.

“We believe that developing minority entrepreneurs is the secret sauce for prosperity in Minnesota,” said Gary Cunningham, president and CEO of the Metropolitan Economic Development Association.

Cunningham estimated that if the funding is approved, 500 minority-owned businesses would receive assistance services within two years, 2,500 quality jobs would be created or retained, and more than 2,000 minority-owned businesses across the state would have access to training and workshops on business topics. A report would be due to the Legislature by Feb. 1, 2022.

Organizations eligible for the competitive grants include:

• African Development Center;
• African Economic Development Solutions;
• Asian Economic Development Association;
• Latino Economic Development Center;
• Metropolitan Economic Development Agency; and
• Northside Economic Opportunity Network.