ST. PAUL — Minnesota is looking to buy small business owners some time with an interest-free loan program as the COVID-19 pandemic strains the state economy.
Minnesota Gov. Tim Walz, who ordered nonessential businesses to shutter in order to contain the spread of the virus, announced the program on Monday, March 23. Eligible businesses can borrow $2,500 to $35,000 from the state at a 0% interest rate, and half of each loan will be forgivable.
The Department of Employment and Economic Development will oversee the $30 million program. DEED Commissioner Steven Grove told Forum News Service on Tuesday that it's important to take advantage of federal assistance before state dollars kick in, but small business loans through the federal government could take weeks to arrive — and "some businesses just don’t have that kind of time."
"How do we get small businesses money as soon as possible at a good rate so those who are potentially teetering on the edge of closing down can buy a little more time until federal dollars kick in" Grove said.
Grove said the program doesn't have a formula to determine how much money will go to each business. They instead can apply for however much they need. And if they're granted some then need more down the line, he said they'll be able to apply again.
Calling small businesses the "backbone of our American economy," Grove said the state has a role in saving them from becoming another COVID-19 casualty.
"They are not just your place to go buy food or your gas," Grove said. "They are your neighbors, your friends and your colleagues. I think small businesses are woven into the fabric of Minnesota life and keeping those businesses alive is just really critical."
And in some ways, Grove said the difficult times could be taking a greater toll on Greater Minnesota towns with just a handful of small businesses than on the concentrated metro.
As small businesses shutter even temporarily in response to the pandemic, many of their employees have been left without work. Since Walz's executive order closing nonessential businesses, Grove said approximately 150,000 Minnesotans have filed for unemployment benefits as of Tuesday. About a third of those work in bars and restaurants.
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