I hope this email finds you well and that you and your family are healthy. Life will eventually return to normal. Until then, please continue to listen to health experts and do your best to help prevent the spread of COVID-19.
I’ve received questions from folks that are self-employed about unemployment options that may be available to them. Below is some information that I hope is helpful.
First, benefits and relief programs are being made available to the self-employed and independent contractors for the first time through Minnesota’s Unemployment Insurance Program, however that program still needs to be set up through the Department of Employment and Economic Development (DEED).
DEED is working with the federal government to make these benefits available as quickly as possible, and we will be sure to send along information as soon as it becomes available. Here’s a guide that will help you through the process when it does: mnhouse.gop/2w1xgRs.
Additional Resources for Businesses
During the last month, several state and federal programs have been built to assist small businesses struggling during the COVID-19 pandemic.
If you are a business owner that has had issues with your application or questions about whether your business is eligible for a program, please contact DEED using the resources available on their website for the fastest and most accurate answers. In addition, programs passed by the federal government may not yet be available — please keep checking the federal program websites for updates.
Different programs make sense for different businesses, so DEED is providing this summary guide to help small businesses quickly see which programs might be right for their situation. These include:
SBA Economic Injury Disaster Loan (EIDL)
Summary of Program: Low interest, long term Economic Injury Disaster Loans for up to $2 million: The first payment is deferred for 12 months. The application has been simplified and can be completed 100% online through an improved web portal at www.sba.gov/disaster. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75% and the loans can be extended over 30 years.
SBA Paycheck Protection Program (PPP)
Summary of Program: The SBA PPP is a new federal $350 billion loan program at SBA for small businesses, self-employed people, and gig workers to help them from going under due to the COVID-19 pandemic. If employers maintain payroll, the loans would be forgiven.
Pandemic Unemployment Assistance Program
Summary of Program: Congress authorized a new Pandemic Unemployment Assistance program that covers those who do not qualify for regular Unemployment Insurance benefits, such as independent contractors and self-employed people. The program was authorized but must be created by the states, so Minnesota must build out this program before it can be implemented. More information will be available soon, however it could be several weeks before payments begin.
Minnesota Small Business Emergency Loan Program
Summary of Program: Minnesota Small Business Emergency Loans are made through an approved lender – you can find FAQs, application materials and lenders on the DEED website. These loans are for $2,500 to $35,000 and at a 0% interest rate. There is a total of $30 million available for this program.
Minnesota Small Business Loan Guarantee Program
Summary of Program: This program provides an 80% loan guarantee for loans up to $250,000 made by a qualified economic development lender within this program. Details for business are not yet on DEED’s website but DEED and agency partners are reaching out to lenders to make them aware of this new program – look for more details soon. This program is intended to be an incentive for the private market to make loans to small businesses and provide the guarantee for those loan dollars. The state is providing a loan guarantee of $10 million which is likely to leverage between $20 and $25 million in lending by private banks.
Unemployment Insurance Shared Work Program
Summary of Program: The Shared Work program offers an alternative to layoffs for employers facing a temporary downturn in business. Administered by DEED’s Unemployment Insurance Division, the program allows employers to divide available hours of work among a group of employees instead of implementing a full layoff. These employees may then receive partial unemployment insurance benefits while working reduced hours. The purpose of Shared Work is to avoid a layoff, not to subsidize wages.
For more information on any of these programs, visit the DEED website here.
Please continue to reach out to me if you have any questions or concerns.
Sondra Erickson is a State Representative from Mille Lacs County.