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EDA accepts revised small business loan guidelines

NEW ULM — The New Ulm Economic Development Authority (EDA) accepted the revised small business loan guidelines and applications Tuesday.

In May, the EDA approved revising the limited loan program into a small business loan program. Staff created separate guidelines and applications for the small business loan and the commercial property loan, which was approved in July 2020. The goal of these revisions is to comprehensively update the documents and provide consistency for staff and applicants.

The small business loan was used extensively at the beginning for COVID relief and projects related to the pandemic including new technology and equipment, operating expenses, inventory and lost revenue.

Economic Development Director Audra Shaneman said the loan is for businesses currently open in a commercial storefront and has 20 or fewer full-time employees. The loans do not require matching funds and the amount is between $2,500 and $10,000.

Unlike the commercial property loan which must be for building improvements, this loan could be for building improvements but is not limited to them.

The loans are provided at a 1% annual interest rate for a five-year term.

Shaneman also reported on the COVID related grants for small businesses. The Emergency Relief Fund started in March with $250,000. Eligible businesses were those closed by the governor’s executive orders. Over 55 businesses were assisted with grants of $2,500. The program closed on April 30.

A Tier Two Relief fund was created on April 14 with $100,000. Businesses negatively impacted by COVID, but not necessarily closed, were eligible. Over 60 businesses were assisted with grants of $1,500. The program closed on July 31. Remaining funds were used for small business loans.

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