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You may have experienced a significant loss in revenue and business decline in 2022 due to the COVID-19 pandemic. Families, small businesses, and communities can apply for small business grants. The state will contribute to small businesses’ economic growth and recovery by providing grants, economic opportunities, funding, business relief programs, financial assistance programs, resources, and information.
government agencies provide $11.74 billion in financing to Minnesota-based businesses, and the local government provides $9.30 billion. There are no restrictions on what type of business can use the funds in Minnesota. Minnesota has more than 81,000 farms and 118,744 businesses.
For small businesses, grants can be used for marketing campaigns, hiring more employees, managing employee expenses, generating business growth, bridging cash flow gaps, and operating expenses. Each year, Minnesota pays $102.17 billion in payroll expenses and salaries. The number of bankruptcy petitions filed by Minnesotans each year is estimated at 22,575 per year. Business expansion plans do not qualify for federal grants when they involve expanding existing businesses. Nevertheless, private lenders and corporate foundations may be able to provide funding to your growing business.
What Is a Grant?
The government awards money to help businesses, projects, or products develop. A grant is not repaid, unlike a government-backed loan. Small businesses benefit from grant programs because of this.
Although grants are low-cost options, application and administration processes can be lengthy. To qualify for funding, your business must show how it will benefit from the funding. Small businesses can receive grants from private organizations, charities, and the state and federal governments.
Minnesota Small Grants
Various grants are available to Minnesota residents to help them finance their businesses. The following grant opportunities may be available to you in 2022.
Small businesses and child care centers can apply for microloans to start up or expand. About $13,000 is the average amount of a microloan. The SBA provides funds to specially designated intermediary lenders that offer management and technical assistance and lending capabilities. For eligible borrowers, these intermediaries administer microloans.
The lending and credit requirements of intermediary lenders vary. Intermediaries generally require a business owner’s guarantee. Small businesses can use microloans for a variety of purposes. Small business loans are used for rebuilding, re-opening, repairing, enhancing, or improving a company.
Community-based nonprofits with lending and business management experience provide microloans. Each person has different needs. SBA-approved intermediaries can help you apply for a microloan. SBA-approved lenders set up your microloan.
One-time funding is being offered by the Initiative Foundation to help Central Minnesota’s smallest businesses recover from the pandemic.
This year, a highly competitive grant cycle is expected, with up to 70 small business grants awarded. Businesses that suffered disruptions and losses due to the pandemic will receive grants of up to $10,000. The $500,000 program supports fair economic recovery in Central Minnesota. The grants will be awarded to small businesses with barriers to capital and other resources and setbacks caused by the pandemic.
This program supports micro-enterprises with fewer than five full-time employees and gross annual revenues under $750,000. Those businesses owned by women, veterans, community members of color, and those in small towns and rural areas, as well as those that opened during the early stages of the pandemic, will be prioritized. Small companies that did not qualify for government relief programs under COVID-19 are also eligible for grants.
The funds can cover expenses from the past, present, or future. Other expenses such as payroll, mortgages, rents, utilities, equipment, supplies, and inventory can also be included here.
Consider that your small business is located in rural Minnesota, and it provides jobs, economic benefits, and technological advancements to the local community. The US Department of Agriculture and Rural Development may be able to help you develop a rural business.
Rural community business development grants can be a great way to boost small enterprises in less populated areas. You might also consider relocating to a rural area if your business is already located in a major city to take advantage of opportunities for expansion and hiring within towns filled with people eager to take on new challenges.
There are a few requirements for rural business development grants. The town you call home is the biggest one. You must have fewer than 50,000 residents in your area to qualify. You must not be in a suburban area to be eligible for the program.
There is no maximum award amount for rural business development grants. Thus, if your business has a clear need (and the USDA deems it worthy of the funds), you may qualify for a substantial amount of money. Grants for smaller projects are given priority, so ask for only what you need to achieve your goal. Although they’re flexible in how you can use them, these grants must be used to develop rural businesses.
Southern Minnesota Initiative Foundation Economic Impact Grants are available to entrepreneurs with businesses that improve their local communities. A company can receive up to $20,000 from this organization if it builds an infrastructure to help develop the region’s economic prosperity-for example, a system that many local businesses could use to increase efficiency. Check SMIF’s 20-county region to see if you qualify for this Minnesota small business grant.
For small businesses with special requirements, the 7(a) Loan Program is the most common loan program of the Small Business Administration. It is a good option if you are buying property as part of a business purchase, but it can also be used for:
- Working capital for short- and long-term projects
- Debt refinancing for existing businesses
- Supplies and furniture purchases
7(a) loans have a maximum loan amount of $5 million. Businesses are evaluated based on their income sources, credit histories, and locations. You can discuss your financial situation with your lender to determine which type of loan would be most suitable for you.
Businesses eligible for 7(a) loans must:
- Be a for-profit business.
- SBA definition of a small business.
- Be engaged in, or propose to do business in, the United States.
- Have a reasonable amount of equity invested.
- Before seeking financial and business assistance, consider alternative financial resources, such as personal assets.
- Prove that a loan is needed.
- Put the funds to good use for your business.
- Comply with all US government debt obligations.
Those companies that meet certain capital investment and job creation targets are eligible to receive financial incentives from the Job Creation Fund.
For creating or retaining high-paying jobs, building or renovating facilities, or making other improvements to the property, companies that qualify may receive up to $1 million. A company may receive a $2 million award in some cases.
The Minnesota Economic Development Association has recognized this award-winning program as innovative.
When searching on Google, you will find many websites offering grants to women entrepreneurs. Online scams and confusing government websites seriously threaten small women-owned businesses. There are a variety of forms and applications that require personal and financial information from women business owners.
Funding for your business venture may be available from a nonprofit organization focused on women, WomensNet. Ultimately, it will be worth the effort, even if it takes some time. This site is a great resource for business owners who want to grow their organizations. Amber Grants is an excellent source of grants for female entrepreneurs. Despite her dreams of becoming a successful entrepreneur, Amber Wigdahl died too young.
Among the businesses eligible for the program are those owned and operated by women in Minnesota (as well as across the nation). The $10,000 Amber Grant, awarded every month, is available right now for you to apply for. The 12 monthly winners will be automatically eligible to apply for a $25,000 grant if they meet the eligibility criteria. That way, through this grant, $35,000 can be awarded over 12 months.
The Minnesota GrantWatch program offers additional funding opportunities for small businesses. The website provides access to grants and loans from local, state, and federal sources for small businesses. With GrantWatch, a free tool for finding grants, you can find grant writers who can prepare winning grant proposals and provide business loans. All grant applications require is the answer to a few simple questions.
The information is only accessible to Minnesota GrantWatch subscribers. A one-year subscription costs $199, and a weekly subscription costs $18. Free members cannot submit grant applications.
Are you interested in learning more about different grants and programs that can help you with your living situation? Check out the rest of Gov Relations’ blog section today!