COVID Small Business Relief: Loans and Grants
Depending on the size of your small business, you may be qualified for certain loans and grants on both the federal and state level.
What is considered a small business?
Small businesses are defined based on what type of industry they belong to. To determine if your business is considered to be a small business by the Small Business Administration, visit the SBA Size Standards webpage.
COVID Federal Small Business Help
The Small Business Administration (SBA) is providing disaster loan assistance in all states. These low-interest loans are targeted toward small businesses and nonprofits that have experienced severe economic injury due to the coronavirus.
As part of the Coronavirus Aid Package (CARES Act), small businesses can also apply for forgivable loans that under the Paycheck Protection Program (PPP) can be used to pay employees and fund other day-to-day business operations. To learn more, visit our guide to the CARES Act or read about the Paycheck Protection Program in particular.
COVID State Small Business Help
Following Executive Order 20-15, DEED has established the Small Buisness Emergency Loans program to provide working capital to help small businesses. Current loan requests have exceeded funding availability. Nonprofits are not eligible for this program.
The Minnesota Department of Employment and Economic Development (DEED) established the Minnesota Small Business Loan Guarantee Program in response to COVID-19. This temporary program helps Minnesota lenders provide capital to affected small businesses with less than 250 total employees.
To stay updated with the state’s small business relief, visit the State of Minnesota's Website.
COVID Small Business Relief: Private Sources
Some private companies and organizations have established grants for small business relief. Facebook is one such company. The Facebook small business grant was created to help small business owners amid disruptions that are being caused by the coronavirus.
Certain credit card companies and banks, like Bank of America, are also offering economic relief for their small business members.
For a larger list, visit our guide to private grants for small business relief.
Private Relief in Minnesota
The Otto Bremer Trust (OBT) established the Community Benefit Financial Company Emergency Fund to provide emergency financial resources to Minnesota, Wisconsin, North Dakota, and Montana nonprofits. All nonprofit organizations in these states are welcome to apply for emergency funding.
The federal government has extended the payment deadline for all first-quarter tax payments from April 15th, 2020 to July 15th, 2020. Small businesses must file IRS Form 7004 to extend their tax payments, while individuals must file IRS Form 4868.
State Tax Relief
The Minnesota Department of Revenue announced that, at this time, Minnesota Individual Income Tax returns will still be due April 15, 2020.
The Minnesota Business Income Tax due date has not changed for Corporation Franchise, S Corporation, Partnership, or Fiduciary taxes. However, C corporations will receive an automatic extension to file their Minnesota return to the end of 7 months after the due date or until the date of any federal extension. S corporations, partnerships, and fiduciaries will also receive an automatic extension to file their state return to the date of any federal extension to file. Taxpayers can request relief from late-filing or late-payment penalties and interest for reasonable causes like emergency declarations due to COVID-19.
There will be a 30-day extension for the Sales and Use Tax for businesses required to suspend or reduce services and for the Lawful Gambling Tax payments for organizations that request an extension for their March 20 payment. There will also be a 60-day extension for MinnesotaCare tax returns for organizations that request an extension for their March 16 return.
Changes to Federal Paid Leave
As of March 18th, 2020, the federal government is providing certain workers paid sick leave in the event that they are ill, quarantined, or seeking medical care.
This relief act applies to employees at small, midsize, and nonprofit companies so long as the employee has been employed for more than 30 days. For more information, you can read the Families First Coronavirus Response Act.
The Department of Labor also recommends that small business employers check if their employee’s sick leave is covered under the Family and Medical Leave Act (FMLA). If an employee or their family is incapacitated due to the coronavirus (or any pandemic illness), their employer is required to provide job-protected, unpaid leave.
So long as employers are covered, they are required to abide by federal FMLA and state FMLA laws. For more information on the FMLA, check out the Department of Labor’s website.
In the event that your small business undergoes financial difficulties during the coronavirus spread, consider implementing these guidelines for the good of your business and its employees:
- Consider putting employees on temporary leave instead of terminating them
- Communicate with customers regarding business closures, reduction of hours, or maintenance changes
- Diversify your suppliers or stock inventory with an adequate amount of supplies to last an extended period of time
- Contact your insurance agent to review any business interruption policies that your business may have in place
- Prepare a plan with your employees regarding present and future business actions regarding the virus
- Review your emergency business continuity plan. If you don’t have one, take a look at New York’s Emergency Planning Process Sheet.
- Determine whether your business is considered essential or nonessential. Visit our guide to essential businesses for more information.
For more business solutions, visit the SBA website.
Minnesota workers affected by COVID-19 will have full access to unemployment benefits and taxpaying employers’ unemployment tax rate will not increase if their workers collect unemployment benefits because of COVID-19 according to Governor Tim Walz’s executive order from March 16, 2020. The order also waives the five-week benefit limitation for business owners who had previously elected for the coverage and have become unemployed as a result of COVID-19.
The Unemployment Insurance Employer customer service phone line (651-296-6141) is currently unavailable.
The Coronavirus Aid Package (CARES Act) is providing extended unemployment benefits to workers who are ineligible for regular unemployment programs but are out of work solely because of the coronavirus pandemic. Unemployment compensation has also been extended by 13 weeks.
NOTE: Workers cannot file for unemployment if they are receiving any kind of direct financial help from your business.
Small business employers should also establish strategies with their employees and customers to avoid spreading the virus:
- Encourage sick employees and customers to stay home
- Separate sick employees from the rest of the employees and encourage them to go home
- Practice good self-hygiene
- Avoid travel
- Clean all work environments routinely and thoroughly
For periodic state updates, visit the Minnesota Department of Health website.
NOTE: The State of Minnesota has issued a “shelter-in-place” executive order shutting down non-essential businesses starting at 11:59 p.m. on March 27 and extended to May 4. To see if your business is considered essential, read the Minnesota governor’s executive order.
The best way to prevent the spread of the virus in your business is to create a “work from home” policy. If your business is able to provide remote work opportunities for its employees, consider the following strategies:
- Invest in new technologies and software
- Provide remote training for employees
- Establish a remote communication system
- Enforce a daily routine
- Trust in your employees’ ability to stay on track