ST. PAUL — Minnesota will loan money to small businesses hurt by coronavirus-related closures through a program announced Monday, March 23.
Businesses that qualify for the program can be loaned between $2,500 and $35,000 at a 0% interest rate. Half of each loan will be forgivable.
Gov. Tim Walz created the program by executive order Monday and in a statement said it is meant to offset losses incurred by business he ordered to close last week. Bars, restaurants, barbershops and other establishments have been shut down since in an effort to contain the spread of COVID-19, the infectious respiratory illness caused by the novel coronavirus.
Many of the state's retailers have closed their doors voluntarily.
The state Department of Employment and Economic Development will oversee the program, which Walz allocated approximately $30 million in state special revenue funding. It estimates that an additional $28 million in small business relief could be tapped into through revolving loan funds, which the order also allows local Minnesota governments and other lenders to issue.
Monday's order comes shortly after the U.S. Small Business Administration announced that it would offer emergency loans in Minnesota and its neighboring states. Businesses that borrow federal emergency loans, however, won't be able to have their state emergency loans forgiven.
In his statement Monday, Walz and DEED commissioner Steve Grove acknowledged the hardship caused that the shutdown has caused and said other steps will need to be taken to abate it.
"Small businesses are the backbone of our communities, and now more than ever, we’re looking to creative solutions like DEED’s ... to help them weather these extraordinarily difficult times," he said.
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