ST. PAUL – Minnesota has launched a new Small Business Emergency Loan Program with $30 million available to help Minnesota small-business owners who need immediate assistance amid COVID-19 closures.
Rep. Dale Lueck, R-Aitkin, said this new state program administered by the Minnesota Department of Employment and Economic Development will help bridge gaps that the federal Small Business Administration Disaster Loan Assistance Program may not address.
“This is a Minnesota-specific financial tool for small businesses as they work through the challenges we face today,” Lueck said. “Loans of between $2,500 and $35,000 will be made for qualifying small businesses. A portion of the loan may be forgivable. The loans are offered at a 0% interest rate. Taking out additional debt may not be the answer for every business, but this program provides another tool with very favorable loan terms.”
These emergency loans will be made by an existing network of lenders DEED works with across the state. According to DEED, if other financing becomes available to small businesses that received an emergency loan, such as federal funding, the emergency loan must be repaid. Depending on the size of the loans offered to businesses, DEED estimates this emergency loan program will provide needed resources to between 1,200 and 5,000 businesses.
DEED indicates it expects loan applications to be available later this week. Minnesota small businesses should send questions about this emergency loan program to ELP@state.mn.us.
The program is the product of an executive order (20-15) issued Monday by Gov. Tim Walz. It directs the DEED to conduct the program via special revenue funds.
The executive order also allows local units of government or lending partners which have a revolving loan fund to use those funds to issue loans to retail and service providers for the next 90 days. DEED estimates that up to $28 million in capital could be accessible through local revolving loan funds and local governments through this action. Local partners will be looking at ways to deploy these resources to support their local businesses.