Iceberg Business Photography, 2341 Penn Ave N, Minneapolis, last week got the first loan awarded by the new North Minneapolis Business Recovery Loan Fund. The Fund provides financing to Minneapolis based businesses directly impacted by the May 22 tornado that swept through North Minneapolis.
The modest loan spelled relief for budding business owner, Joseph Moore, owner of Iceberg Business Photography.
“We just opened and put quite a bit of money in it,” Moore said. “The tornado was surreal, something you don’t expect. This provides some relief,” he said.
Moore said the tornado affected sales. “With the shop being closed, our grand opening was derailed. We have been doing work from our homes.”
The Federal Emergency Management Agency (FEMA) determined on two separate occasions that North Minneapolis did not qualify for assistance because of the ability of state and local governments, along with local volunteer organizations, to handle the recovery.
Minneapolis’ Community Planning and Economic Development (CPED) department in partnership with the Minnesota Agricultural and Economic Development Board (MAEDB) and the Metropolitan Consortium of Community Developers (MCCD) created the Business Recovery Loan Program to be the city’s front line initiative to provide some help to small businesses.
The Fund is expected to assist 50 area businesses. Businesses can apply for funding to cover operating costs during the days they lost power, or to make building repairs, or to replace inventory, when such costs are not covered by insurance.
North Minneapolis businesses impacted by the May 22 tornado are eligible to apply for low interest loans to help cover the costs of tornado related damages of up to $5,000 at a 4% interest rate for a term not to exceed 3 years.
Principal and interest payments will be deferred for six months. If the business remains in operation for two years beyond the loan origination date, half of the principal balance, or $2,500, will be forgiven. If the business moves out of Minneapolis, or does not remain in operation longer than the two years beyond the loan origination date, the remaining balance will need to be repaid, said Fund managers.
Business owners will need to submit a completed loan application and provide required financial documentation to the Northside Economic Opportunity Network (NEON) or the West Broadway Business and Area Coalition (WBC).
Minneapolis city staff will review the application, determine financial viability, and process the loan requests. MCCD will originate loans and provide loan servicing.
A $25 loan origination fee will be collected from the borrower at loan closing. If a business is moving to a new location, loan funds can only be used to cover moving costs.
Businesses that are still closed as a result of the May 22 tornado, you are eligible to receive a loan if the business owns the building where business is operated.
Eligible uses of the Business Recovery Loan Program funds include insurance deductibles, building and equipment repair, and inventory replacement. Program funds can also be used to assist with business interruption expenses, limited to a maximum of $2,000.
Loan funds cannot be used to fund advertising.
MCCD executive director, Iric Nathanson said that the loan process is streamlined in order to move funds to tornado-impacted businesses as soon as possible.
“North Side businesses will find that this is a user-friendly program with a minimum of red tape. The loans are being allocated on a first-come first serve basis so we are encouraging businesses to apply as soon as possible. We are likely to commit all of our available funds by the end of August,” he said.
For Moore, the loan is a step towards recovery. “We are excited about the future. We business owners who reside in this community who want to provide services to the people of this community,” Moore said.
To find out additional information regarding the Business Recovery Loan Program and qualifications for eligibility, contact Iric Nathanson at 612 789-7337 x 14 or firstname.lastname@example.org