The Small Business Administration (SBA) is offering disaster loans of up to $2 million to businesses and residents in the Twin Cities who incurred financial damage from the protests and riots in late May and early June.
The move comes after the Federal Emergency Management Agency denied a request from Gov. Tim Walz for federal disaster aid to reimburse local governments as they begin to clear away rubble and rebuild structures.
Meanwhile, state and local officials in Minneapolis and St. Paul have been slow to pull together financial assistance, in part because they’re waiting to see what the other will do.
Nearly 1,500 Twin Cities businesses were damaged by vandalism, fire and looting that happened after protests over the police killing of George Floyd. Estimates of damage exceed $500 million.
The SBA said it will offer low-interest loans repayable over as long as 30 years for working capital and to repair damage that happened from May 27 to June 8. The agency will accept loan applications until early October.
“Businesses and private nonprofit organizations may borrow up to $2 million to repair or replace disaster damaged or destroyed real estate, machinery and equipment, inventory, and other business assets,” Brian McDonald, the SBA’s Minnesota district director, said in a statement.
For small businesses and small agricultural cooperatives, and most private nonprofits, SBA offers Economic Injury Disaster Loans to help meet working capital needs. They are available regardless of whether the business suffered physical property damage. Homeowners and renters who incurred related damage are eligible for loans of up to $40,000.
Interest rates are as low as 3% for businesses, 2.75% for nonprofit organizations and 1.25% for homeowners and renters with terms up to 30 years. Loan amount and terms are based on each applicant’s financial condition.
Hundreds of small businesses on E. Lake Street, W. Broadway and University Avenue in St. Paul that were torched and looted in the days following Floyd’s death remain shuttered.
Kaltuma Hassan, who stood in July in the wreckage of her grocery store on the South Side in Minneapolis, wondered how she could rebuild. Like her neighbors, Hassan was frustrated by the failure of state lawmakers to pass legislation that would have put much-needed cash in the hands of struggling business owners.
“If they want to help us, what are they waiting for?” asked Hassan, who won’t be able to rebuild Bismillah Grocery and Coffee without assistance because her insurance policy would cover just $100,000 of her $500,000 loss. “It makes you angry. It is destroying our chance.”
Democrats have proposed giving small business owners as much as $300 million to cover uninsured damage, but Republicans have opposed the legislation, citing concerns over the size of the bailout as well as the role Minneapolis officials, accused of being slow to respond as demonstrations over the death of George Floyd in police hands turned to riots. Some key Republican leaders won’t support the rebuilding effort unless local officials in Minneapolis and St. Paul contribute to the program.
SBA loans of up to $200,000 are also available to homeowners to repair or replace damaged or destroyed real estate, and homeowners and renters are eligible for loans up to $40,000 to repair or replace damaged or destroyed personal property, according to the SBA.
The SBA made the loans available in response to a request from Walz for a disaster declaration by the agency. The declaration covers Hennepin County and the adjacent counties of Anoka, Carver, Dakota, Ramsey, Scott, Sherburne and Wright.
The SBA’s Virtual Disaster Loan Outreach Center will help prospective recipients apply online through the SBA’s secure website at disaster loanassistance.sba.gov.