Governor Walz Executive Order 20-15: Special Revenue Funds from Minnesota’s DEED Will Be Used for Small Businesses Emergency Loan Program
Many Minnesota businesses are quickly feeling the effect of the COVID-19 pandemic. Prior newsletters from Fafinski Mark & Johnson have discussed a delay in the deadline to file taxes, federal legislation expanding Family and Medical Leave and providing for paid sick leave for employees affected by COVID-19, and a new SBA loan program to provide economic disaster loans. On March 23, Governor Walz issued an executive order which, among other things, establishes an emergency loan program for small businesses.
The new loan program totals $30 million and will provide between $2,500 and $35,000 in loans to affected businesses. According to Commissioner Steve Grove of Minnesota’s Department of Employment and Economic Development (DEED), the loan program is specifically aimed at bridging the gap while affected businesses wait for federal money, which could take 60 days or more to fund.
According to DEED, eligibility for loans will be based on a company’s economic injury due to the Governor’s temporary closure order, the company’s financial need will be interest-free, and must be repaid over five years with monthly payments with the first payment deferred six months, and maybe partially forgiven. Only companies operating in Minnesota for at least one year are eligible for this emergency loan program. Borrowers must also be willing to provide collateral or a personal guarantee for at least 20% of the loan and have been denied a loan from a private lender or be in the process of seeking SBA Economic Injury Disaster Loan assistance.
Borrowers can apply for a loan through this new program at DEED’s website: https://mn.gov/deed/business/financing-business/deed-programs/peacetime/.