Information for small businesses who need financial help during the pandemic

In addition to the health and wellness impact, the COVID-19 pandemic is having a huge impact on the local economy. Both the state and federal governments are working feverishly to develop programs designed help small businesses stay afloat during this time.

The Minnesota Department of Employment and Economic Development has a helpful guide on their website to the different programs available. That guide can be found here: http://mn.gov/deed/newscenter/press-releases/ index.jsp?id=1045-425890.

Here are the highlights: 

SBA Economic Injury Disaster Loan (EIDL): The Small Business Administration is offering Economic Injury Disaster Loans. These are low interest, long term loans up to $2 million, and can be used to maintain payroll, provide paid sick leave, meet increased costs, make rent or mortgage payments and pay unmet expenses and obligations. You can also request a $10,000 advance to be disbursed immediately. To fill out the new simplified application, go to covid19relief.sba.gov.

SBA Paycheck Protection Program (PPP): this is a new federal program intended to help small businesses, self-employed people and independent contractors. If the money received is used to maintain payroll, including salaries, wages, commissions or similar compensation, vacation, parental, family, medical or sick leave, payment required for providing group health care benefits (including insurance premiums); payment of retirement benefits; and payroll taxes the loan is forgiven. Funding may also be used for payment of interest on mortgage obligations, rent, utilities, and interest on pre-existing debt obligations.

Pandemic Unemployment Assistance Program: This program is for people who do not qualify for unemployment insurance benefits, including independent contractors and self-employed people. 

The program was authorized by Congress, but each state is required to administer it, so it might take some time before it’s up and running. 

Minnesota Small Business Emergency Loan Program: These are loans made through a local approved lender specifically for businesses that were affected by Executive Orders 20-04 (restaurants, food courts, cafes, bars, theaters, fitness centers, bingo halls, bowling alleys, golf clubs, etc.) and 20-08 (fitness centers, exercise studios, tanning establishments, tattoo parlors, hair and nail salons, barber shops, etc.), forcing them to close or restrict their business dramatically due to the pandemic. These are zero percent loans for between $2,500 and $35,000, intended to help meet expenses.

The Minnesota Small Business Loan Guarantee Program: This program provides an 80 percent loan guarantee for loans up to $250,000 made by a qualified economic development lender within the program. The program is intended to incent the private market to make loans to small businesses and provides the guarantee that may be required to obtain such a loan.

Unemployment Insurance Shared Work Program: This program offers an alternative to layoffs for employers facing a temporary downturn in business. It allows employers to divide available hours of work among a group of employees instead of implementing a full layoff. Employees receive partial unemployment insurance benefits while working reduced hours. 

DEED recommends that business owners start by contacting your insurance company. There may be benefits available through your policy.

Next, call your bank to get their advice and find out what resources they might have available.

If you’ve been denied credit by a bank or the SBA, call any of the approved lenders for the Small Business Emergency Loan Program for this area – for Renville and Redwood Counties, contact the Southwest Initiative Foundation at 320-583-0162. Sibley County businesses should contact the Southern Minnesota Initiative Foundation at 507-456-0356 or 507-461-0578.

For additional assistance, contact the Southwest Minnesota SBDC (Renville and Redwood Counties) at 507-537-7386, or South Central MnSBDC (Sibley County) at 507-389-8875.