Minnesota has made two loan programs available for businesses impacted by the coronavirus pandemic, and applications are being accepted.
The loan programs were created by an executive order signed by Minnesota Gov. Tim Walz on March 23 and are designed to help small businesses. The loan programs are still being developed and access to funds is expected soon, according to Kari Howe, of the Minnesota Department of Employment and Economic Development.
“I can't tell you when the money will be released yet, but I know the approval process also started last Friday,” said Howe, who made her remarks at a video conference arranged by the Grand Forks/East Grand Forks Chamber. The meeting focused on emergency business financing for Minnesota companies.
Howe urged Minnesota businesspeople to visit https://mn.gov/deed/ and sign up for the department’s newsletter to keep up with developing information.
“We have some new things going on all the time,” said Howe. “We, too, are drinking out of firehose and still are moving forward with our applications as well.”
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The first program, called the Small Business Emergency Loan Program, offers from $2,500 to $35,000 in financing to cover operating expenses. Businesses must be located in Minnesota and must show they have been negatively impacted by the pandemic. The loan carries a 0% interest rate with a five-year term and has the possibility of forgiveness. Loans must be applied for through the Northwest Minnesota Foundation, the approved lender for the region.
Bars, restaurants, salons, theaters and golf courses are only some of the types of businesses eligible for the program. Gambling operations and adult-oriented businesses are out of luck for the loan, as are businesses that derive income from passive investments.
The second loan, called the Minnesota Small Business Loan Guarantee Program, will provide an 80% guarantee up to $200,000. This loan must be applied for through a bank or credit union that is enrolled in the state program. The list of lenders can be found on mn.deed.gov and is growing, as more and more lenders join the program.
The Loan Guarantee Program is for companies with fewer than 250 employees, and companies must be based in Minnesota. Funds can be used for a variety of purposes, including working capital or machine purchases, though the money must be spent in Minnesota.
Howe cautioned conference participants to make sure they are using official government websites to protect themselves from fraud.
“Be sure that you're looking at websites that have ‘gov’ at the end,” Howe said. “There's a lot of scams going on, and you want to really take care of where you're getting your information.”
