Since Governor Tim Walz enacted the first closure of public areas and businesses on March 13, followed by a stay at home order due to the COVID-19 pandemic, many businesses have either closed for the time being or have been forced to reduce certain services typically offered.

Since Governor Tim Walz enacted the first closure of public areas and businesses on March 13, followed by a stay at home order due to the COVID-19 pandemic, many businesses have either closed for the time being or have been forced to reduce certain services typically offered.

This week, the Monte­video Community Devel­opment Corporation (MCDC) has announced that it is offering an Emergency Microloan Program to businesses who are unable to get federal or state funding at this time.

“This program is aimed to help small businesses that have been unable to get state or federal financial assistance during this time,” said Alek Schulz, Community Economic Development Specialist. “Businesses can get up to $10,000 through this program; $5,000 at 0 percent interest, and anything above that is at 4 percent.”

Schulz also stated that the loan will have a three-month deferment, with a maturity date of five years.

To be eligible for the program, the business must have existed as of March 13, 2020, and must have proof of trying to get alternative funding elsewhere. The business must be located within Montevideo city limits, and must have had financial suffering due to the “Peacetime Emergency.”

The program will be available for six months, and all applications received will be reviewed by a committee appointed by the MCDC board.

“A business is still eligible even if it has a loan already in place with the city,” said Schulz. He added that the use of the funds are for any cost necessary to assist the business through this time of emergency.

Collateral for the loans will be by personal guarantee. Credit life insurance may be required, which would pay off, or be applied to the loan in the event of the death of the borrower. The MCDC will be named as a loss payee, and/or mortgage on the hazard insurance coverage of the business, or any associated collateral as well.

In addition, mortgage on owned real-estate of security interest in personal property.

“All applicants will complete the standard MCDC loan application. Other documents to support the loan request will be required, which may include any or all of the following: business financial statements, business income tax returns, financial projections, personal finance statements, personal income tax returns, and a personal credit report,” Schulz explained. He also stated that additional items may be required, as deemed by the MCDC.

Additionally, borrowers are responsible for all legal, title, security instrument perfection, and associated legal costs incurred in closing the loan.

Businesses interested in applying for a loan must sign a Supplemental Loan Agreement if one is requested, and no applicant will be denied a loan based on race, color, national origin, religion, age, disability, marital status, or sex. A business subsidy agreement must also be signed, and compliance with local floodplan management and zoning ordinances, in addition to state and local building codes will be required.

“You must be a U.S. citizen or have documentation showing legal status to work and operate business in the U.S., and must be currently licensed to do business if applicable, and current on all real estate taxes, special assessments, or other amounts due to the City of Montevideo,” said Schulz.