ALERT- St. Paul, Minnesota- On June 16, 2020, Governor Tim Walz signed into law the Small Business Relief Grants Program. The Minnesota Department of Employment and Economic Development (“DEED”) will oversee the program.
Chiefly, the Small Business Relief Grants Program makes available $10,000 grants to Minnesota owned and operated businesses that have suffered significant financial hardship due to the COVID-19 pandemic. The program follows the federally funded Paycheck Protection Program which made available forgivable loans to those businesses that qualified and used the funds appropriately. The Small Business Relief Grants Program makes $60.3 million available in grants which will be awarded to applicants by a random computer selection process.
Similar to the Paycheck Protection Program, the funds must be used for working capital to support payroll expenses, rent, mortgage payments, utility bills, and other allowable expenses that occur or have occurred since March 1, 2020. The expenses must occur in the regular course of business. Again, the awards are considered grants; therefore, no repayment is required.
To be eligible for an award under the Small Business Relief Grants Program, an applicant must:
- Be a private for-profit business that has a permanent physical location in Minnesota;
- Be majority-owned by a permanent resident of Minnesota;
- Be in good standing with the Minnesota Secretary of State and the Minnesota Department of Revenue as of March 1, 2020;
- Employ the equivalent of 50 or fewer full-time workers; and
- Be able to demonstrate financial hardship as a result of the COVID-19 pandemic.
Notably, businesses that received funding through the Small Business Emergency Loan Program are not eligible, but those businesses that received funding through the Small Business Administration’s various emergency loan programs are still eligible for the state-funded program.
Of significance, there are minimum amounts set aside for targeted Minnesota groups and businesses. 50% of the funds will be available for businesses based in greater Minnesota. The other 50% of funds will be available for businesses based in the 7-county metro area which includes (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington counties.
Additionally, the funds are allocated as follows:
- $18 million for businesses with six or fewer full-time workers;
- $10 million for minority business enterprises;
- $2.5 million for businesses that are majority-owned and operated by veterans;
- $2.5 million for businesses that are majority-owned and operated by women; and
- $2.5 million for operators of indoor retail and food markets with an ethnic-cultural emphasis.
Lastly, applications will be accepted for a 10-day period beginning Tuesday, June 23 2020 through Thursday, July 2. Please visit the Minnesota Department of Employment and Economic Development website to apply.
Established more than 95 years ago, Quinlivan & Hughes ranks among the oldest and largest law practices in Central Minnesota. The full-service law firm has growing legal teams in the areas of employment law, business law, government law, insurance defense, trust and estate planning, and general litigation. Learn more at Quinlivan.com.