Dear neighbors:

I hope this message finds you healthy and safe! We are in the midst of the “stay-at-home” order issued by Governor Walz in an effort to combat the coronavirus pandemic. While most businesses must remain closed, many essential businesses – including those food and agricultural businesses critical to our food chain – remain open for business. Additionally, many local bars and restaurants remain open for takeout and delivery services. It is more important than ever that we support our local businesses!

As we navigate these unprecedented times, both the state and federal government is acting quickly to provide some relief. Here’s what you need to know:

State government actions

Last week, the Minnesota Legislature passed a third COVID-19 response bill, which appropriates an additional $331 million to aid Minnesotans during the coronavirus pandemic. Previous COVID-19 bills passed by the legislature allocated $221 million in funding for medical needs, bringing the total to $552 million this year to address the coronavirus pandemic in Minnesota. 

We know that we need to be ready for an increase in COVID-19 cases and hospitalizations, and there are significant costs to government agencies to prepare and respond. The most recent bill we passed establishes a dedicated “COVID-19 Minnesota Fund”, which can only be used for expenses incurred during the COVID-19 peacetime emergency as declared by the governor’s executive order. Examples of increased costs would be additional healthcare and staffing needs in prison facilities, staffing and overtime for direct care and treatment, and resources for activities by the Minnesota National Guard in response to COVID-19.

Additionally, the bill includes $30 million in Child Care Aware grants during the peacetime emergency to make sure our essential employees — educators, health care workers, and emergency responders — have access to childcare. The legislation also includes provisions to make sure college students receive work study pay and that financial aid is not affected by our mitigation efforts. Temporary powers granted in the bill allow the Commissioner of Higher Education to waive rules and statues for work study, SELF loans, and the state grant program to assist students in financial hardship. The bill conforms to changes made at the federal level in response to COVID-19. Other provisions in the bill relax the REAL ID requirements, which were already presenting a backlog for Minnesotans, extending by one month the process to appeal your property tax bill, and make temporary unemployment insurance modifications.

Finally, the bill also makes available $10 million in loans for small businesses across the state. The loan program is intended to give small businesses and independent contractors access to capital to weather this economic crisis – in addition to federal efforts below. 

Federal government actions

Late last month, President Trump signed the CARES Act into law – the third large stimulus package passed by the federal government. It includes several provisions designed to provide some relief to both workers and small businesses affected by the coronavirus pandemic.

UNEMPLOYMENT INSURANCE: The bill includes $250 billion to expand Unemployment Insurance (UI) benefits for jobless Americans. In addition to the UI benefits offered by the State of Minnesota, the CARES Act increases the federal benefit by $600/week through the end of July. In addition, workers can receive UI benefits for up to 39 weeks (an increase of 13 weeks). Individuals already receiving unemployment can apply for an extension; individuals nearing the end of their benefit period can reapply and receive both the $600 payment and extension. These benefits will last through December 31, 2020.

The bill also temporarily expands UI eligibility to include self-employed individuals, gig workers, independent contractors, freelancers, part-time workers, furloughed employees, and others who can no longer physically go to their job. Individuals who recently started a new job but were laid off due to the pandemic are also eligible, even if they would not have had enough work history to previously qualify. 

PAYCHECK PROTECTION PROGRAM: The CARES Act also includes financial assistance for small businesses through tax relief and federally guaranteed loans. The bill includes $350 billion for the Paycheck Protection Program, which provides funds for small businesses (with fewer than 500 employees) for up to eight weeks of payroll costs, including benefits. 

The funds are provided in the form of loans up to $10 million that can be fully forgiven if used for payroll costs. Loan payments will be deferred for six months and no collateral or personal guarantees are required. In addition to small businesses, nonprofits, veterans’ organizations, tribal organizations, self-employed individuals, sole proprietors, and independent contractors are also eligible to apply.

Small businesses and sole proprietorships can apply starting April 3, 2020. Independent contractors and self-employed individuals can apply starting April 10, 2020. You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or participating Farm Credit System institution. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.

ECONOMIC INJURY DISASTER LOAN PROGRAM: The CARES Act expands the eligibility for the EIDL Program to include tribal businesses, cooperatives, and ESOPs with fewer than 500 employees. They are also available to all non-profits, sole proprietors, and independent contractors. EIDLs less than $200,000 can now be approved without a personal guarantee; self-employed individuals and small business owners are eligible for a forgivable $10,000 advance on an EIDL to help rapidly cover business expenses.

Want to know more? Check out the Small Business Owner’s Guide to the CARES Act, which breaks down the legislation and provides information on the new loan programs available to small business owners: https://www.sbc.senate.gov/public/_cache/files/9/7/97ac840c-28b7-4e49-b872-d30a995d8dae/F2CF1DD78E6D6C8C8C3BF58C6D1DDB2B.small-business-owner-s-guide-to-the-cares-act-final-.pdf