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State’s small businesses could get COVID-19 boost from $100 million grant program

A St. Paul business sits temporarily closed in April 2020. HF4522 proposes to appropriate $100 million from the General Fund for a pandemic relief program targeted at small businesses. (House Photography file photo)

Many small businesses across the state are still struggling to recover from the COVID-19 pandemic. Rep. Julie Sandstede (DFL-Hibbing) has proposed giving them a boost with grants of up to $25,000.

She sponsors HF4522 that would appropriate $100 million from the General Fund for a pandemic relief program. The bill was laid over Wednesday by the House Workforce and Business Development Finance and Policy Committee for possible omnibus bill inclusion.  

Grants would go to restaurants, bars, cafés, salons, escape rooms, trampoline parks, yoga studios, health clubs, recreation centers and other small businesses whose revenue crashed during the pandemic. They could be used for payroll rent, utilities or business expenses incurred this year.

“These are real people who faced unimaginable hardship through no fault of their own,” Sandstede said. “While I’m not looking to relitigate the public health approach as it related to businesses, I do think we can all agree they need some sort of assistance – a lifeline to remain in business.”

Minnesota businesses lost about $15 billion in revenue during the pandemic, said Ben Wogsland, executive vice president of Hospitality Minnesota. Its surveys show about half of businesses don’t expect revenues to return to pre-pandemic levels until 2023. At the same time, businesses are seeing significant increases in labor, utility and supply expenses.

Grant recipients would be chosen by lottery and must show hardship caused by COVID-19. There would be a 10-day window for applications.

Grants would go to businesses with 50 employees or fewer, and at least $15 million would be directed to business with fewer than six employees.

Additionally:

  • $10 million would go to minority business enterprises;
  • $2.5 million to businesses owned and operated by veterans; and
  • $2.5 million to businesses owned and operated by women.

Rep. Tony Jurgens (R-Cottage Grove) asked if grants could be used to pay increased unemployment insurance rates. Sandstede said she is confident legislators could provide small business grants and also address the shortfall in unemployment insurance trust funds.

The companion, SF4240, is sponsored by Sen. David Tomassoni (I-Chisholm) and awaits action by the Senate Jobs and Economic Growth Finance and Policy Committee.


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