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DEED creates emergency loan program for small businesses hit by COVID-19 closures

MARSHALL — With many small businesses temporarily shut down due to COVID-19 response, the Minnesota Department of Employment and Economic Development is offering emergency loans to help.

DEED announced this week that it is creating an emergency loan program to provide immediate assistance for small business owners, during the COVID-19 closures. The loan program was created under an executive order from Gov. Tim Walz on Monday. The program is meant to help businesses that were closed down by previous executive orders, including salons, fitness centers, theaters and bars.

The orders to close businesses was aimed at preventing people from gathering in groups and possibly spreading the coronavirus. However, small business owners might not have enough of a cash flow to get through a temporary closure.

DEED has been directed to create a Small Business Emergency Loan Program, by making $30 million available from special revenue funds. That money will be used by DEED’S lender network to make loans of between $2,500 and $35,000 for qualifying small businesses, an announcement from the city of Marshall said.

The emergency loans will be 50% forgivable, and offered at a 0% interest rate. If other financing, like federal funding, becomes available to small businesses that received an emergency loan, the emergency loan must be repaid.

Depending on the size of the loans offered to businesses, DEED estimates it will be able to provide resources to 1,200 to 5,000 Minnesota businesses.

DEED said it expected loan applications to be available this week through its lender network. Small businesses with questions about the program should email ELP@state.mn.us.

The executive order creating the emergency loan program also allows local units of government or partners that have a revolving loan fund to use those funds to issue loans to retail and service providers for the next 90 days. DEED estimates that up to $28 million in capital could be accessible through local revolving loan funds and local governments.

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