Over the past few weeks, several state and federal programs have been built to assist small businesses struggling during the COVID-19 pandemic.
Different programs make sense for different businesses, so we’re providing this summary guide to help small businesses quickly see which programs might be right for their situation.

Federal Paycheck Protection Program Begins 4/3/20

An SBA loan program that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.

Program Overview

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program will be available through June 30, 2020.

Who Can Apply

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries. Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.

As small businesses prepare to apply for the Paycheck Protection Program, the Minnesota Bankers Association wanted to send out some additional information. Here is a press release we put together to help small businesses.

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%.

If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.

Other Assistance

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for disaster assistance. Enhanced Debt Relief is also available in SBA’s other business loan programs to help small businesses overcome the challenges created by this health crisis. For information on additional Lending options, please click here. SBA provides local assistance via 68 district offices and a nationwide network of resource partners. Find resources near you.

Federal Economic Injury Disaster Loan Program

To apply for a COVID-19 Economic Injury Disaster Loan, click here.
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing, providing economic relief to businesses.  This loan advance will not have to be repaid. Economic Injury Disaster Loans are also available to residents in declared disaster areas. View the full list of disaster declarations.

To apply for a disaster loan unrelated to COVID-19, click here.

Minnesota Business Assistance Programs

DEED Small Business Emergency Loan Program Overview
The MN Small Business Emergency Loan program provides targeted loans to small businesses that were directly impacted by the Governor’s closure order. These loans are made through an approved lender and range from $2,500 to $35,000 based on the business’s economic injury and financial need. These loans are interest free and will be paid back monthly over a 5-year term. The first payment is deferred to 6 months and partial loan forgiveness may be available. Loans can be used for rent or mortgage payments, payroll for current employees and working capital.

Who Can Apply: Small businesses directly and adversely affected and whose industries are named in Executive Orders 20-04 and 20-08
How to Apply: Businesses should apply directly through a certified lender. A list of lenders and application materials are available on DEED’s webpage for this program.

DEED Small Business Loan Guarantee Program Overview
The MN Small Business Loan Guarantee Program will provide an 80% loan guarantee for loans up to $250,000 made by a qualified economic development (QED) lender that participates in this program. Loans must be used in Minnesota, and can be used for machinery purchases, maintenance or repair; expenses related to moving into or within Minnesota; and working capital. The rate, term, and collateral requirements of each loan will be determined by each individual lender. The purpose of this program is to provide an incentive for the private market to make loans to small businesses by providing a state guarantee for those dollars.

Who Can Apply: Minnesota businesses with 250 or fewer employees are eligible to apply.
How to Apply: Businesses will be able to apply to loans through the QED lenders that enroll in the program. Each QED lender will use their own underwriting and loan evaluation criteria and decisions will be made based on the discretion of the lender. DEED is currently in the process of accepting lender applications to participate in the program. *Details for small businesses are not yet available on DEED’s website, but DEED is currently in the process of working with and accepting applications from lenders who would like to participate in the program

All of the resources above and more can be found on MN DEED Information for Businesses page.

Minnesota Unemployment Information

Visit the COVID-19 unemployment insurance page to apply for UI, and find the answers to some commonly asked questions.

There are more options available for both businesses and employees at both the state and federal level to help with the effects of the coronavirus COVID-19 crisis.