Bill would fund study on effectiveness of state programs to aid small businesses

A quick visit to the Department of Employment and Economic Development website shows myriad educational programs and grants to help small businesses start up, grow, and prosper.

But can the department better make sure its services for small businesses are most effective and have maximum reach to business owners who could benefit the most from its programs?

Now is the time to find out, says Rep. Mohamud Noor (DFL-Mpls).

“It’s really important that we look into the barriers and obstacles that many small businesses are facing,” Noor said, especially with so many small businesses struggling due to the COVID-19 pandemic, and metro-area businesses recovering from civil unrest.

Rep. Mohamud Noor

Noor sponsors HF1784, which would appropriate an unspecified amount in the 2022-23 biennium from the General Fund to conduct a study of the effectiveness and impact of the department’s small-business support programs. A report would be due to the Legislature by Jan. 15, 2023.

The House Workforce and Business Development Finance and Policy Committee held the bill over Monday for possible omnibus bill inclusion. The companion, SF2082, sponsored by Sen. Bobby Joe Champion (DFL-Mpls), awaits action by the Senate Jobs and Economic Growth Finance and Policy Committee.

All DEED services in fiscal years 2018-2021 for entrepreneurs and businesses with fewer than 300 employees would be examined, with special attention to assistance for Black, Indigenous, people of color, and female entrepreneurs.

“This bill will ensure that we do a thorough study that will reflect where the need is and how we can really support disadvantaged businesses,” said Noor, the committee chair.

“It’s really important that we help Minneapolis and St. Paul businesses grow and get back on their feet again after some really, really rough times, with the unrest and the pandemic,” said Rep. Dave Baker (R-Willmar).

Cesia Baires, owner of Abi's Cafe in Minneapolis, had no credit history three years ago when she started her restaurant. Loans from traditional sources were out of the question, she said, and she struggled to piece together financing where she could, including from relatives.

“I think this study of small-business programs is a good idea because it shouldn’t be so hard to start a business, to create jobs, or to find out about help that is available,” she said.

Some of DEED’s programs “are not necessarily promoted well to us,” said Danny Schwartzman, owner of Common Roots Cafe and Catering in Minneapolis. “I feel like I don’t have a good understanding of the full range of programs that exist.”

To do the study, DEED would consult with an advisory group of four program administrators and at least eight small-business owners from economically disadvantaged areas, at least half of whom are Black, Indigenous, people of color, and women, selected by Main Street Alliance.