The Minnesota Department of Employment and Economic Development (DEED) is creating an Emergency Loan Program to assist small businesses affected by the COVID-19 pandemic. Small businesses are a vital part of Minnesota’s economy and this program will provide a source of working capital to help businesses sustain operations during this challenging time.
- Range from $2,500 to $35,000 and will be based on the firm’s economic injury and the financial need.
- Be interest free.
- Be paid back monthly over five (5) years and the first payment will be deferred six (6) months with potentially partial forgiveness.
- Be provided to only Minnesota-based businesses.
In order to be eligible for a Small Business Emergency Loan, businesses must be able to demonstrate that it was directly and adversely affected by the conditions that precipitated the emergency declaration as noted in Executive Orders 20-04 and 20-08.
The following businesses are noted in those Executive Orders:
- Restaurants, food courts, cafes, coffeehouses, and other places of public accommodation offering food or beverage for on-premises consumption, excluding institutional or in-house food cafeterias that serve residents, employees, and clients of businesses, child care facilities, hospitals, and long-term care facilities.
- Bars, taverns, brew pubs, breweries, microbreweries, distilleries, wineries, tasting rooms, clubs, and other places of public accommodation offering alcoholic beverages for on-premises consumption.
- Hookah bars, cigar bars, and vaping lounges offering their products for on premises consumption.
- Theaters, cinemas, indoor and outdoor performance venues, and museums.
- Gymnasiums, fitness centers, recreation centers, indoor sports facilities, indoor exercise facilities, exercise studios, and spas tanning establishments, body art establishments, tattoo parlors, piercing parlors, businesses offering massage therapy or similar body work, spas, salons, nail salons, cosmetology salons, esthetician salons, advanced practice esthetician salons, eyelash salons, and barber shops. This includes, but is not limited to, all salons and shops licensed by the Minnesota Board of Cosmetologist Examiners and the Minnesota Board of Barber Examiners.
- Amusement parks, arcades, bingo halls, bowling alleys, indoor climbing facilities, skating rinks, trampoline parks, and other similar recreational or entertainment facilities.
- Country clubs, golf clubs, boating or yacht clubs, sports or athletic clubs, and dining clubs.
To qualify, the businesses must:
- Be current on financial obligations as of March 1, 2020
- Be an existing small business (whatever the form of their organization)
- Have been operating in Minnesota for at least one year
- Be willing to provide collateral or personal guarantee for at least 20% of loan
- Have been denied credit by a lender and have sought or be in the process of seeking, SBA Economic Injury Disaster Loan assistance.
- Pay-off the emergency loan if financing is received subsequent to loan approval.
Loans cannot be provided to businesses that:
- Derive income from passive investments without operational ties to operating businesses
- Generate any part of its income from gambling or adult-oriented activities
- Have no current or historical financial statements
How to apply:
Applications may be made with the assistance of a certified nonprofit lender. If a lender doesn’t have capacity, they may ask DEED for assistance. All applicants must supply historical financial information for the business and some applications will require a personal financial statement for each owner who holds at least a 20% interest in the business.
If a loan is approved, businesses should expect to provide the following legal documents and other information prior to receiving loan funds:
- Loan Agreement
- Promissory Note
- Security Agreement
- Personal Guarantee(s)
- Industry-specific data regarding business operations prior to the emergency declaration
Several loan officers will be reassigned to this initiative. All will answer questions sent to [email protected].