U.S. Small Business Administration (SBA) Disaster Loans Now Available To Minnesota Businesses
Dear Business Owner,
We want to make sure you are kept up to date on resources as we weather this pandemic. Here’s an update as of 4/3/20. In the meantime, stay safe and healthy!
SBA Paycheck Protection Program Opened On Friday, April 3rd
The SBA Paycheck Protection Program (PPP) is a new federal $350 billion loan program at SBA for small businesses, self-employed people, and gig workers to help them from going under due to the COVID-19 pandemic. If employers maintain payroll, the loans would be forgiven. The PPP was developed from the U.S. CARES Act, the $2.2 trillion COVID-19 rescue package signed into law by the federal government last week. You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Lenders may begin processing loan applications as soon as April 3, 2020. For more information, visit the SBA website.
DEED Announces Small Business Loan Guarantee Program
This temporary program will help Minnesota lenders provide capital to small businesses in Minnesota affected by COVID-19. These loans can be used for a variety of purposes and can be subordinate to other financing. Allowable loan uses must be exclusively in Minnesota and include machinery or equipment purchases, maintenance, or repair; expenses related to moving into or within Minnesota; and working capital when the working capital is secured by fixed assets when possible.
The funds can only be provided to Minnesota businesses with fewer than the equivalent of 250 employees. The number of employees includes parent company and all locations. The program will provide an 80% guarantee up to a maximum of $200,000. A fee of .25 percent on the guarantee loan principal will be charged for each loan enrolled into the program. This program has not yet launched and DEED is currently seeking lenders who are interested in participating. For more information, visit the DEED website.
DEED Publishes A Very Useful Guide For Minnesota Businesses That Need Help
Since the COVID-19 pandemic started effecting the small business community just a few short weeks ago, many programs have launched or expanded to help struggling business owners. It can be challenging to keep them all straight. We recommend small business owners check out DEED’s new guide for small businesses who need help. The guide contains a useful summary of each program, and the ways in which it might be helpful for small business owners struggling in the midst of the pandemic.
- SBA disaster loan information at https://disasterloan.sba.gov/ela/Information/Index
- Information for small businesses affected by coronavirus at www.sba.gov/coronavirus
- All coronavirus-related federal government resources: www.usa.gov/coronavirus
- DEED’S COVID-19 information and resources for businesses COVID-19 update page.