Small Business Emergency Loans

Following Executive Order 20-15, DEED established a loan program to assist small businesses directly and adversely affected and whose industry was named in Executive Orders 20-04 and 20-08 following the start of the COVID-19 pandemic. Small businesses are a vital part of Minnesota’s economy and this program provided a source of working capital to help businesses sustain operations during this challenging time.

Businesses applied directly through a certified lender. A list of participating lenders are available in the tabs. Nonprofits were not eligible for this program.

NOTE: The program concluded on 6/30/2020 and is no longer active. Lenders are no longer taking applications and no additional approvals will be made.

Terms
Eligibility
Apply
Post-Approval
Funding Map
FAQs
Contact

Terms

Loans will:
- Range from $2,500 to $35,000 and will be based on the firm’s economic injury and the financial need
- Be interest free
- Be paid back monthly over five (5) years and the first payment will be deferred six (6) months
- Partial forgiveness may be available
- Be provided to only Minnesota-based businesses
Eligibility

In order to be eligible for a Small Business Emergency Loan, a business must be able to demonstrate that it was directly and adversely affected by the conditions that precipitated the emergency declaration as noted in Executive Orders 20-04 and 20-08.

The following type of businesses noted in those Executive Orders are eligible:
- Restaurants, food courts, cafes, coffeehouses, and other places of public accommodation offering food or beverage for on-premises consumption, excluding institutional or in-house food cafeterias that serve residents, employees, and clients of businesses, child care facilities, hospitals, and long-term care facilities.
- Bars, taverns, brew pubs, breweries, microbreweries, distilleries, wineries, tasting rooms, clubs, and other places of public accommodation offering alcoholic beverages for on-premises consumption.
- Hookah bars, cigar bars, and vaping lounges offering their products for on-premises consumption.
- Theaters, cinemas, indoor and outdoor performance venues, and museums.
- Gymnasiums, fitness centers, recreation centers, indoor sports facilities, indoor exercise facilities, exercise studios, and spas tanning establishments, body art establishments, tattoo parlors, piercing parlors, businesses offering massage therapy or similar body work, spas, salons, nail salons, cosmetology salons, esthetician salons, advanced practice esthetician salons, eyelash salons, and barber shops. This includes, but is not limited to, all salons and shops licensed by the Minnesota Board of Cosmetologist Examiners and the Minnesota Board of Barber Examiners.
- Amusement parks, arcades, bingo halls, bowling alleys, indoor climbing facilities, skating rinks, trampoline parks, and other similar recreational or entertainment facilities.
- Country clubs, golf clubs, boating or yacht clubs, sports or athletic clubs, and dining clubs.
To qualify, the businesses must:
- Be current on financial obligations as of March 1, 2020
- Be an existing small business (whatever the form of their organization)
- Have been operating in Minnesota long enough to demonstrate financial viability
- Be willing to provide collateral or personal guarantee for at least 20% of loan
- Be unable to qualify for a standard loan through a bank, credit union, or nonprofit lending organization
- Pay-off the emergency loan if financing is received subsequent to loan approval.
Loans cannot be provided to businesses that:
- Derive income from passive investments without operational ties to operating businesses
- Primarily generate income from gambling activities
- Generates any part of its income from adult-oriented activities
- Have no current or historical financial statements

Apply

The Small Business Emergency Loan Program was authorized to make loans through June 30, 2020 and applications to the program are no longer being accepted.

Application were made directly through a certified nonprofit lender.

All applicants must supply historical and projected financial information for the business, as well as a personal financial statement for each owner who holds at least a 20% interest in the business. Lenders may ask for this financial information and other information required to process the loan, including permission to pull credit reports, after the initial application is submitted.

The following certified lenders serve the county where the business is located.

Certified Lenders

Lender	Counties Served
African Development Center	Statewide
African Economic Development Solutions	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, Washington
Cass County EDC	Cass
Central Minnesota Development Company	Statewide
Community and Economic Development Associates	Statewide (Rural counties only)
Entrepreneur Fund	Aitkin, Benton, Carlton, Cass, Cook, Crow Wing, Itasca, Kanabec, Koochiching, Lake, Mille Lacs, Morrison, Pine, St. Louis, Stearns, Todd
Greater Bemidji	Beltrami, Cass, Clearwater, Hubbard
Hmong American Partnership	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, Washington
Initiative Foundation	Benton, Cass, Chisago, Crow Wing, Isanti, Kanabec, Mille Lacs, Morrison, Pine, Sherburne, Stearns, Todd, Wadena, Wright
Latino Economic Development Center (LEDC)	Statewide (Información del préstamo de emergencia traducido por LEDC)
Leech Lake Financial Services	Leech Lake Reservation Area
Metropolitan Consortium of Community Developers	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, Washington
Metropolitan Economic Development Association	Statewide
Neighborhood Development Center	Hennepin, Ramsey
North Central Economic Development Association	Cass, Chisago, Crow Wing, Isanti, Kanabec, Mille Lacs, Morrison, Pine, Todd, Wadena
Northland Foundation	Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, St. Louis
Northside Economic Opportunity Network	Hennepin
Northwest Minnesota Foundation	Beltrami, Clearwater, Hubbard, Lake of the Woods, Kittson, Mahnomen, Marshall, Norman, Pennington, Polk, Red Lake, Roseau
Southern Minnesota Initiative Foundation	Blue Earth, Brown, Dodge, Faribault, Fillmore, Freeborn, Goodhue, Houston, LeSueur, Martin, Mower, Nicollet, Olmsted, Rice, Sibley, Steele, Wabasha, Waseca, Watonwan, Winona
Southwest Initiative Foundation	Big Stone, Chippewa, Kandiyohi, Rock, Lyon, Lincoln, Redwood, Renville, Meeker, McLeod, Pipestone, Nobles, Swift, Yellow Medicine, Murray, Jackson, Cottonwood, Lac qui Parle
West Central Initiative	Becker, Clay, Douglas, Grant, Otter Tail, Pope, Stevens, Traverse, Wilkin
WomenVenture	Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, McLeod, Ramsey, Scott, Sherburne, Steele, Washington, Wright

Post-Approval

If a loan is approved, businesses should expect to provide the following legal documents and other information prior to receiving loan funds:
- Loan Agreement
- Promissory Note
- Security Agreement
- Personal Guarantee(s)
- Industry-specific data regarding business operations prior to the emergency declaration
Funding Map

Use this interactive map to see where Small Business Emergency Loan (SBEL) projects are located throughout Minnesota.

You can see the amount of the awards, lending partner, and more for each project and download the data.

View the Funding Awards Map

The map will open in a new window.

Program Statistics

Loans totaling $27,247,570 were made to 1,020 small businesses with eligible locations in Minnesota.

Eligible industries were those included in Executive Orders 20-04 and 20-08. Ten eligible industry categories were tracked. The categories with the most small businesses served by the program were:
- Restaurants, cafes and coffee shops (47% of loans)
- Spas, salons and barbershops (21%)
- Indoor sports, fitness and exercise facilities (11%)
Demographics

Information about race, ethnicity and gender of owners who received loans was reported by lenders after lending concluded. The race/ethnicity of 14% of owners and gender of 6% of owners is unknown. Some businesses identified as having owners who fit into more than one group. Information provided below is by number of loans.

Race or Ethnicity
- White (58%)
- Black (11%)
- Latinx (8%)
- Asian Pacific Islander (7%)
- Indigenous (1%)
- More than one race or ethnicity (1%)
Gender
- Male (42%)
- Female (34%)
- More than one gender (18%)
FAQs

Are all businesses eligible for a Small Business Emergency Loan (SBEL)?

No. To be eligible, the business needs to operate primarily in one of the industries noted in Executive Orders 20-04 or 20-08. Business types that were or may be closed under different executive orders are ineligible.

Are nonprofit organizations eligible?

No. Executive Order 20-15, which directed the development of SBEL, allows loans to be provided only to businesses, not nonprofits. A for-profit business owned by a nonprofit may be eligible depending on other eligibility questions.

Are sole proprietors eligible?

Yes. As long as the business can demonstrate a history of operations and provide supporting documentation, it may be organized under any legal structure.

How much is a SBEL?

Loans are between $2,500 and $35,000. The actual amount will depend on the lender's determination of business need (e.g., operating expenses) and ability to repay. Loans will not exceed three months' eligible operating expenses.

How can I get a SBEL?

An eligible business needs to submit an application and financial information to a certified lender. The application needs to be complete as the lenders will review only complete applications.

Should SBEL be my first choice of financial assistance?

No. To be eligible, a business needs to file applicable insurance claims and be ineligible for a standard loan from a lender (which may include a SBEL certified lender). Because the SBEL proceeds should be considered a bridge loan, any loans or grants received subsequent to the SBEL proceeds should be used, when allowed by the lender, to pay off the SBEL.

How does SBA assistance fit into a business recovery plan?

All businesses are encouraged to apply for SBA assistance as the overall financing and associated terms may be better than the SBEL and would not be considered a "bridge loan" like the SBEL is.

How many SBEL loans can a business receive?

Each business that has a legal entity may receive one loan. If a business owns several business operations that are all under one entity (e.g. multiple locations), one loan will be provided.

What if only part of a business' operations are included in the eligible industries?

If the eligible industry represents at least 51% of business revenues (and the ineligible operation represents no more than 49%), then that business is eligible.

What expenses can be covered a SBEL?

Rent or mortgage payments, payroll for current employees and working capital are some of the expenses that a SBEL can be used to fund. The loans cannot be used to pay or refinance past debt.

How much will an SBEL cost?

The State of Minnesota is providing operating funds to the lenders so the only costs to a business borrower will be hard costs like credit reports, etc.

How long can I receive a SBEL loan?

Loans will be available during the COVID-19 pandemic.
Contact

Please review the list of Frequently Asked Questions section before contacting us. If you still have questions, email them to ELP@state.mn.us with "Emergency Loans" in the subject line.