The Cloquet Economic Development Authority announced a small business assistance loan program to prevent permanent closure and aid in restoring businesses affected by the COVID-19 pandemic to financial health.
The EDA is making $300,000 available for small businesses. The money is in addition to funds available from federal, state and regional sources to assist struggling businesses.
“The EDA really wanted to be that fourth in line safety net of funds,” Community Development Director Holly Hansen said. “We also have some funds, and we want to make some funds available to help businesses during this time.”
The loans are targeted at for-profit businesses affected by Gov. Tim Walz’s executive orders limiting or closing non-essential businesses during the COVID-19 pandemic. They can provide up to $20,000 in working capital with a six month deferral period, a five-year term and 2% interest rate.
To be eligible for the loans, businesses must:
Be located within the city limits of Cloquet and operate within commercial, office or industrial properties;
Be affected by the COVID-19 virus and demonstrate they have applied for federal and state programs like the Small Business Administration or the Minnesota Department of Employment and Economic Development;
Use the loan for working capital and inventory. It cannot be used for the business owner's or manager’s personal expenses;
Demonstrate they are current on financial obligations as of March 1 and are not in violation of the city’s zoning code; and
Were an existing business at least six months prior to March 1.
Priority will be given to businesses with less than 30 full-time employees prior to Walz’s executive order and make $2 million or less in annual gross revenue. The city will evaluate businesses with more than 30 employees on a case-by-case basis.
Applicants must complete an Entrepreneur Fund Loan application at info.entrepreneurfund.org/cloquetbusinessassistanceloan, as well as provide business tax returns and a personal financial statement. A narrative document is also required detailing changes the business has made to stay viable during the outbreak, its plans to get through the pandemic and what the business will look like post-pandemic.
This story was updated at 10:15 a.m. on May 20 to reflect that the City Council does not need to approve the program. It was originally posted at 9 a.m. on May 20.