Government works to make loans available as Minnesota small businesses struggle to survive
The COVID-19 outbreak has forced leaders to scramble to contain the virus and led to many businesses shutting down. (FOX 9)
(FOX 9) - The closures and disruptions from the coronavirus containment are hammering small businesses across Minnesota and the United States.
Efforts to contain the spread of the illness have forced government officials to take drastic steps, including restricting the operation of restaurants, bars, and concert venues among other businesses.
Wednesday, the Small Businesses Administration announced an expansive loan program to help businesses survive.
In the eyes of the government, a small business has up to 500 employees. By that standard alone, we have more than half a million small businesses across the state, according to the SBA.
There’s hardly a business out there that isn’t feeling some kind of disruption from the COVID-19 crisis. Governor Tim Walz signed the necessary disaster declaration Wednesday night to the SBA.
Its local director, Brian McDonald, said Thursday afternoon that once the governor’s declaration is approved, they will immediately starting processing loans to Minnesota businesses who apply.
"It’s critical for fixed costs that businesses are suffering right now due to this crisis to help pay for payroll and for working capital," said McDonald. "Again, it’s up to $2 million at 3.75 percent for 30 years."
The interest rate for non-profit businesses is 2.75 percent. If the loan is approved, you can defer payments for the first four months and businesses can borrow up to $2 million. Until the application portal is open, McDonald says businesses should start gathering the needed paperwork now.
"So, the biggest thing right now to start preparing is to get your financial statements in order from the last year," he said. "So, to know what you are losing this year compared to last year. And also to get your tax forms in place as well."
Once the portal is up and running for Minnesota, you can apply online. Brian McDonald say business owners should keep checking for the portal to go online.
At the same time, Senator Amy Klobuchar says she's working on new legislation to give assistance to start-up companies. But she also wants to get the federal government to extend unemployment benefits.
"These companies don’t want to lose employees," she said. "Especially in our state. We traditionally have had some amazing employees and they don’t want to lose them. So, a lot of this is going to be making sure that we have unemployment, expanded unemployment benefits in place. So, that when they are laid off, they can be kept whole, so that they’re able to go back to work. The sick leave for people that are working obviously really important."
Senator Klobuchar says what concerns here the most is the growing number of cases and the lack of enough is testing to know how big the spread really is.