NEW ULM – After seven years, the New Ulm Economic Development Authority has chosen to discontinue its Small Business Incentive Grant program.

The Small Business Incentive Grant program started in 2019 to support new small businesses in New Ulm with their start-up expenses during their first year of operation. The grant reimburses owners for eligible expenses up to $10,000 per business. Each year, $50,000 is allocated to the program, with a total of five businesses funded.

EDA Director Heather Bregel said the incentive grant began as a pre-COVID measure to spur new small businesses in the community. One of the ideas behind the grant was to fill empty storefronts in New Ulm’s downtown area.

“Downtown New Ulm was not as vibrant then as it is today,” Bregel said. “After COVID, filling up downtown is not as big a problem.”

New Ulm saw a spike in entrepreneurship following the COVID pandemic, with several small businesses starting. Bregel said when the program first began, the EDA board had hoped at least five new businesses would apply for the grant, but within a few years the number of new businesses applying exceeded the limit. Each year, a few applicants had to be turned down for the grant.

To be eligible for the grant, a small business needed to be open for at least three months but less than a year. In addition, applicants had to submit a business plan and invest at least $10,000 into their business and prove it through invoices before being eligible. Bregel said technically, the program was a reimbursement grant.

Even with the requirements for the grant, the EDA continued to see more applicants than funds were available.

“People are opening businesses with or without the grant,” Bregel said. “The board started asking if we even needed the grant anymore.”

During Tuesday’s EDA meeting, the board voted to formally end the grant program. EDA president Michelle Markgraf said the grant had served its purpose well.

Board member Lindsay Henn made the motion to end the program, with a second from board member Mike Lieb. It was unanimously approved by the board.

Bregel said the five grants approved for 2026 will be paid, but these will be the final grants awarded.

Henn asked if they planned to create a new program to replace it. Bregel said the EDA is currently in the process of reviewing all of its economic programs. After finishing the review, the board will hold a work session to discuss whether any new programs need to be created.