Purpose

Create a Minnesota business recovery loan program to help small businesses in Minnesota recover and stabilize after the impact of immigration enforcement activities starting December 1, 2025. The goal is to rebuild jobs and support the state’s economy.

Key provisions and how it works

• Funding and structure
  • A one-time appropriation of $100 million in fiscal year 2026 from the Minnesota Forward Fund to the Small Business Emergency Loan account (special revenue fund) for loans under this program.
  • Money is available through June 30, 2028; any unspent funds after that date are canceled.
  • Of the $100 million:
  • $18 million is for grants to Minnesota Initiative Foundations to provide zero-interest loans to businesses in greater Minnesota.
  • $82 million is for grants to qualifying nonprofit corporations that are certified partners to provide zero-interest loans to businesses in the seven-county metropolitan area.
  • The commissioner of employment and economic development will choose approved lenders and assemble a list of lenders with the capacity to run the program.
  • Administration costs from the appropriation cannot exceed 8%.
• What the program is (the loan program)
  • A Minnesota business recovery loan program is created to help businesses adversely affected by immigration enforcement activities in Minnesota, starting December 1, 2025.
• Eligibility for a loan
  • The business must:
  • Be located in Minnesota and owned by a permanent resident of Minnesota.
  • Have a permanent physical location in the state.
  • Be in good standing with the Secretary of State and the Department of Revenue as of December 1, 2025.
  • Employ the equivalent of a certain number of workers or have annual gross receipts at levels set for the loan amount categories.
  • Demonstrate a revenue loss greater than 30% during the period from enactment to December 1, 2025, compared to the same period the prior year, due to factors related to immigration enforcement (staffing losses, reduced hours, or other productivity losses; reduced customer access; or other stability issues caused by enforcement).
• Loan amounts and regions
  • Minnesota Initiative Foundations (Greater Minnesota region)
  • Minimum state contribution: $2,500
  • Maximums by business size/receipts:
    • Up to 10 FTE or $150,000 receipts: up to $25,000 loan
    • 11–20 FTE or ≤$500,000 receipts: up to $50,000 loan
    • 21–100 FTE or ≤$1,500,000 receipts: up to $150,000 loan
  • Seven-county metropolitan area
  • Minimum state contribution: $2,500
  • Maximums by business size/receipts:
    • Up to 25 FTE or ≤$500,000 receipts: up to $50,000 loan
    • 26–50 FTE or ≤$1,000,000 receipts: up to $75,000 loan
    • 51–200 FTE or ≤$2,000,000 receipts: up to $200,000 loan
• How the funds may be used
  • Loans must be for business purposes within Minnesota.
  • Funds cannot be used to consolidate, repay, or refinance debt incurred before December 1, 2025, and cannot be used for real estate speculation or investment.
• Repayment and forgiveness
  • Deferred payments: repayments start within three months after the loan is awarded.
  • Forgiveness schedule (if lender criteria are met and payments are current):
  • Up to 50% forgiven after at least two years.
  • Up to 75% forgiven after at least three years.
  • Up to 100% forgiven after at least five years.
• Reporting and oversight
  • Lenders participating in the program must provide quarterly reports to the commissioner, including which businesses were supported, loan activity, sources of funds, assets and liabilities, and administrative expenses.
  • By June 30, 2028, the commissioner must compile the information and provide a report to the chairs and ranking minority members of the Senate and House committees with jurisdiction over economic development.

Significant changes to existing law

• Creates a new state-operated Minnesota business recovery loan program funded through a dedicated appropriation tied to the Minnesota Forward Fund and the Small Business Emergency Loan Account.
• Establishes a framework for zero-interest loans via partnerships with Minnesota Initiative Foundations (Greater Minnesota) and certified nonprofit partners (metro area), including grant-based support rather than direct lending in some cases.
• Adds specific eligibility criteria tied to immigration enforcement effects and sets explicit loan amounts by region and business size.
• Introduces a formal forgiveness schedule for loans, dependent on meeting lender criteria and timely payments.
• Adds mandatory quarterly reporting by lenders and a comprehensive program-wide report to lawmakers.

Relevant terms - Minnesota Forward Fund - Small Business Emergency Loan Account - Minnesota Initiative Foundations - zero-interest loans - seven-county metropolitan area - Greater Minnesota - permanent resident - immigration enforcement - revenue loss - full-time equivalents (FTE) - annual gross receipts - loan forgiveness - deferred payments - limited administrative costs - special revenue fund - Minnesota Statutes section 116M.18 subdivision 9 - reporting requirements - lender capacity and approved lenders