ST. PAUL — Federal authorities will allow small businesses in the Upper Midwest to apply for disaster relief loans in hopes of cushioning the economic blow dealt to the state and nation by the coronavirus pandemic.
The U.S. Small Business Administration announced late Friday, March 20, that both Minnesota and Wisconsin have been approved for its Economic Injury Disaster Loan program, which offers up to $2 million in assistance. Business and nonprofits that borrow money through the program can use it to pay for expenses such as fixed debts, payroll and accounts payable.
North Dakota and South Dakota had also been approved for the same program earlier Friday.
Loan terms can range up to 30 years in length at interest rates of 3.75% for small businesses and 2.75% for non-profit organizations.
In a Saturday morning press call, the SBA's Minnesota district director Brian McDonald called the loan program a "great tool for the 530,000 small businesses here in Minnesota that we can work with closely."
The agency began to accept applications for the program through its website late Friday night. SBA regional administrator Robert Scott said the agency has not projected the number of applications that could be submitted.
Disaster loans could provide some relief for the many businesses that have closed across the region in a bid to contain the spread of COVID-19, the respiratory illness caused by the novel coronavirus. The Minnesota Department of Health on Friday reported that 115 cases have been confirmed in the state so far.
Twenty-six cases of the illness have been confirmed in North Dakota, meanwhile, as of Friday.
Minnesota health officials on Saturday morning confirmed the first death caused by COVID-19 in Minnesota. The global death toll stood at approximately 9,800 a day earlier, according to the World Health Organization, with the worldwide case total of approximately 234,000.
Because the disease appears to be highly contagious, Minnesota Gov. Tim Walz and North Dakota Gov. Doug Burgum this week ordered restaurants, bars, barbershops and a multitude of other businesses to shut their doors. The immediate loss of business has, for many, resulted in a loss of jobs
About 95,000 workers in Minnesota applied for state unemployment insurance benefits this week, according to the state's Department of Employment and Economic Development. In Minnesota, Walz ordered the agency to waive some wait times that are normally required for new benefit applicants so they can start to collect them sooner.
"Small businesses across Minnesota are putting the health of their neighbors before their bottom line," Walz said in a statement. "This assistance will help our state’s businesses recover from the economic hardship caused by COVID-19."
Scott, who oversees a region that encompasses Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin, said Saturday that the SBA is making similar efforts to quickly administer disaster loans. It takes 2-3 weeks to be approved for one, he said, and another few days for funds to be issued.
"Our administration is well aware that the times need to be shorter," he said.
Payment on disaster loans can be deferred for up to a year, while current SBA borrowers in Minnesota that have been affected by the pandemic can ask for deferments of up to six months.
As a public service, we’ve opened this article to everyone regardless of subscription status.