COVID-19 PROGRAMS

These are unprecedented times and we are grateful that you are continuing to trust ONB with your banking needs. There are a few local, state and national programs that have come available in recent days to try to address the immediate needs of small businesses affected by the recent COVID-19 related shutdowns. While things are changing on a daily basis, we are doing our best to stay informed and aware of everything being made available right now so that we can better serve you.

This webpage is to provide you with information on the programs available. Should you have any questions about these, feel free to contact Megan Jundt at megan.jundt@bankononb.com and/or Adam Bair at adam.bair@bankononb.com. They have been working diligently to try to stay informed on what is out there for you right now.

One great resource is a page set up by the Rochester Area of Economic Development (RAEDI) “COVID-19 Resources for Businesses.” This website is a great starting point. You can find this information by following this link:

http://www.raedi.com/doing-business-here/covid-19-resources.php

PROGRAMS:

City of Rochester COVID-19 Emergency Economic Development Fund:
The City of Rochester / Rochester Area Economic Development, Inc. (RAEDI) COVID-19 Emergency Economic Development loans will be used to provide assistance to small local businesses directly during the COVID-19 pandemic event. It is intended to be an interim financial aid to help keep businesses operating and a part of the tax base once the pandemic is over, and be able to support their employees in times of declining or no business. If applicants meet the State of Minnesota Department of Employment & Economic Development’s Shared Work Program requirements, they also must have applied to that program as a prerequisite to filing the City’s emergency loan application.
• Qualifying business must be located within City of Rochester municipal limits and must not have more than 25 full time equivalent (FTE) employees.
• The maximum loan amount not to exceed $25,000.
• Loan will be amortized over a period of 36 months on a monthly payment basis, with the payments starting 90 days after the state of emergency declaration is terminated.
• Interest rate of 1%, accruing from the date of state of emergency ending. If loan is repaid within six (6) months of the state of emergency ending, then no interest to be paid.
• Loans may be repaid in whole or in part anytime without penalty.
• Applying for this loan will NOT disqualify you for additional funds from the SBA Emergency Loan Program, any of the State of Minnesota Department of Employment & Economic Development assistance programs or any other local assistance programs that may be available.
Applications must be received no later than April 3rd. You can find application information by following this link:

https://www.rochestermn.gov/departments/emergency-management/covid-19-emergency-economic-development-and-stability-information

Minnesota Department of Economic DEED Information:
Small Business Emergency Loans:
Following Executive Order 20-15, DEED has established a loan program to assist small businesses directly and adversely affected and whose industry is named in Executive Orders 20-04 and 20-08 following the COVID-19 pandemic. Small businesses are a vital part of Minnesota’s economy and this program will provide a source of working capital to help businesses sustain operations during this challenging time.

Loans will:
– Range from $2,500 to $35,000 and will be based on the firm’s economic injury and the financial need
– Be interest free
– Be paid back monthly over five (5) years and the first payment will be deferred six (6) months
– Partial forgiveness may be available
– Be provided to only Minnesota-based businesses

Follow this link for eligibility information and information on how to apply:
https://mn.gov/deed/business/financing-business/deed-programs/peacetime/

(Applications must be submitted to either the Community and Economic Development Association or Southern MN Initiative Foundation (SMIF). Their contact information should be in the link above).

U.S. Small Business Administration Disaster Loan Program:
Small business owners in all U.S. states are currently eligible to apply for a long-term, low-interest loan due to COVID-19. The SBA’s Economic Injury Disaster Loan Program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.

Businesses can now apply for $10,000 in immediate capital relief. This amount is forgivable. It will be deducted from the Paycheck Protection Program forgiveness portion when the time comes. Even if a borrower already applied or was denied, they can still get this $10,000.  Please follow the link below to apply with SBA Disaster Resources.

At the current moment, businesses are still to apply to these loans through the SBA (follow the link below). Currently, legislation is trying to be passed that would allow FDIC Insured SBA Certified lending institutions to administer these loans. Once we have an update on this, we will look into how to get this done.

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

The CARES Act–Paycheck Protection Program

*Please note – this program was just announced on Friday, March 27th. We are awaiting further instruction from SBA on this program and will update accordingly. At this time we are not accepting applications for this program, but hope to be able to as soon as instruction is received from SBA.*

Designed to help nonprofit and for profit businesses with less than 500 employees cover payroll and other expenses.
Under the Program, small businesses may receive cash-flow assistance in the form of loans administered through banks and credit unions. Loan proceeds may be used to cover payroll, mortgage and debt interest, rent, and utilities.

To qualify, the borrower must have been in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes. The borrower must certify that “the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations.”
Loans are available in an amount up to 2.5 times monthly “payroll costs” over the past year, with a cap at $10 million.

“Payroll costs” include:
•• wages, commissions, salary, and similar compensation to employees;
•• cash tips or the equivalent;
•• vacation, parental, family, medical, or sick leave;
•• allowances for dismissal or separation;
•• group health care benefits and premiums; and
•• state or local taxes assessed on employee compensation.

“Payroll costs” do not include:
•• employee annual salaries in excess of $100,000;
•• employer Social Security payroll taxes;
•• compensation for employees living outside the United States; or
•• qualified sick leave or family medical leave for which a credit is available under Families First Coronavirus Response Act.

Generally, no personal guarantees or collateral are required. Usual closing fees are waived. Interest rates may not exceed 4 percent. Payments are deferred for at least 6 months, but not more than 1 year. Once repayment starts, loans have a maximum maturity of 10 years.

The loans may be forgiven, beginning June 30th, if the proceeds are used for payroll, interest payments on mortgages, rent, or utilities. The forgiven amount will be tax free. However, the forgiven amount may be decreased by a reduction in workforce or in salaries, or wages paid during the covered period. This reduction may be avoided if employer rehires or increases employee pay within the time-period allotted.

https://www.fclaw.com/insights/newsletters/2020/the-cares-act—paycheck-protection-program

IRS COVID Tax Relief Information:
https://www.irs.gov/coronavirus

Additional Resources:
For even more information on resources to businesses during COVID-19, the Rochester Area Chamber has put together this page of resources that includes information on the following:
– COVID-19 Business Tool Kit
– Shared Work Program
– Sales & Use Grace Tax Period
– Unemployment Insurance for Employees and Employers
– Small Business Resource Guide

Follow this link:
https://www.rochestermnchamber.com/