It's no secret that the COVID-19 pandemic has been tough on small businesses, but help is available for those which are struggling. Locally, the EDA and MCDC are doing what they can, and the Small Business Administration has also stepped up to help small businesses.
It’s no secret that the COVID-19 pandemic has been tough on small businesses, but help is available for those which are struggling. Locally, the EDA and MCDC are doing what they can, and the Small Business Administration has also stepped up to help small businesses.
Alek Schulz, Community Economic Director, has been hard at work keeping up to speed on developments intended to aid struggling local businesses. He said: “The EDA and MCDC are currently doing a 90-day deferral on all of our active and current loans to try and give our businesses the option to take a breather from payments. Nothing will be added on top of what they owe; in the end we are extending their loan’s maturity date by three months. Once the 90-day deferral period comes to an end, their payments will continue from where they left off.”
What happens after 90 days is wholly dependent upon the current progression of the COVID-19 pandemic. “If this continues longer than the 90 days,” said Schulz, “the EDA and MCDC will meet to see what options to pursue.”
According to Schulz, there are other options which could be available to small businesses. He said: “We are exploring different emergency funding options which we might be able to offer at the local level. Right now, all the funds available to small businesses are coming from the federal level.”
According to Schulz, it is a process to access those funds. “The funds originate at the federal level, then are distributed to the state. Then, from what I see, those funds will go to each of Minnesota’s Regional Development Commissions before they get distributed to our local governments.”
Part of Schulz’s job has been to reach our to all local businesses and ask them if they wanted to participate in the loan deferral program. For those who chose to participate, the agreement was reached verbally over the phone to avoid having to meet in person at this time. “We did put together a paper trail so we could manage this, but we’ll get signatures when it is more appropriate. We don’t want to meet face-to-face if we don’t have to,” said Schulz.
The EDH and MCDC are willing and able to work with business owners at this time. “We still have loan funds active and available,” said Schulz. “All these funds do come with rules and regulations from where we got those funds from originally. As this emergency has continued, some of those funds have relaxed those regulations, and we are monitoring that.”
The Small Business Administration (SBA) is going out of their way to aid small businesses facing financial hardship. “We’re trying to push businesses and organizations to go after these SBA funds,” said Schulz. “By going through them, businesses could save a lot of time, especially with the Payroll Protection Program.”
According to Schulz, the Payroll Protection Program will be offered through local banks. “These are loans which our lending institutions will handle. It’s the SBA’s way of getting money to those who need it as quickly as possible without having to go through a traditional loan process.”
An additional benefit of this is that these SBA loans are able to be forgiven if all of a business’s employees are kept on payroll for eight weeks. “The money has to be used for payroll, mortgage, rent, or utilities for that to happen,” said Schulz.
Another program has been made available to small business by the Minnesota Department of Economic and Employment Development (DEED). Schulz said: “DEED has a program which is meant to be a bridge loan, which is basically money given to businesses to tide them over until a larger sum of money becomes available to them.”
According to Schulz, it may take up to three weeks for businesses to see the funds from applying for the Payroll Protection Program. “If people need money right away because bills are piling up, the DEED emergency loan is the way to go,” he said. “The loan amount can range from $2,500 and $35,000, based on economic need. We feel it’s a good deal if you only need the money short-term to keep the lights on.”
Schulz is keeping the lines of communication open between the city and local businesses. “Some of our businesses are working through this; they’re doing what they can until federal or state guidelines shut them down. Many of our local restaurants are doing takeout, which is fantastic! They’re making the best of a terrible situation,” he said.
The city of Montevideo is happy to work with local businesses to secure funding while the pandemic continues. “I’ve been calling, emailing, and having conversations with businesses over the past few weeks to provide them with the information they require,” said Schulz.
“I want to let people know I’m here for them,” he continued. “I’ll help them if they have questions or need help with applications. Some of the applications are daunting; they can contain a lot of regulations and legal terms, but I’ll do my best to help them with the process.”