Purpose

Establish a Minnesota business recovery loan program to help businesses in Minnesota that are negatively affected by activities and events related to increased immigration enforcement starting December 1, 2025. The goal is to help rebuild and stabilize affected businesses, protect jobs, and support Minnesota’s economic recovery.

Key funding and structure

• Onetime appropriation of $100,000,000 in fiscal year 2026 from the Minnesota Forward Fund to the commissioner of the Department of Employment and Economic Development (DEED) for the small business emergency loan account in the special revenue fund (Minnesota Statutes section 116M.18, subd. 9). Funds available until June 30, 2028.
• Distribution of the funds:
  • $18,000,000 as grants to the Minnesota Initiative Foundations to provide zero-interest loans to businesses in Greater Minnesota.
  • $28,200,000 as grants to nonprofit corporations that meet criteria under statute and are certified nonprofit partners to provide zero-interest loans to businesses in the seven-county (Twin Cities metro) area.
  • DEED will select an approved list of lenders capable of operating the program.
• Administrative cap: no more than 8% of the amount appropriated may be used for administrative costs.
• Unexpended funds canceled after June 30, 2028.

Eligibility for loans

• A business must:
  • Be located in Minnesota and owned by a permanent resident of Minnesota.
  • Have a permanent physical location in Minnesota.
  • Be in good standing with the Secretary of State and the Department of Revenue as of December 1, 2025.
  • Employ the equivalent number of workers or have annual gross receipts that fit the loan-level thresholds (per subdivisions 4 and 5) and show a revenue loss greater than 30% during the period from the day after this act is enacted to December 1, 2025, compared with the same period the previous year, due to:
  • Staffing shortages or loss of employees from immigration enforcement-related disruptions,
  • Reduced customer access to the business due to immigration enforcement activities, or
  • Other factors affecting business stability from immigration enforcement.

Loan amounts and areas

• Minnesota Initiative Foundations (Greater Minnesota):
  • Minimum contribution: $2,500
  • Maximums by size/receipts:
  • Up to 10 full-time equivalents (FTE) or $150,000 receipts: up to $25,000 loan
  • More than 11 but up to 20 FTE or $500,000 receipts: up to $50,000 loan
  • More than 20 but up to 100 FTE or $1.5 million receipts: up to $150,000 loan
• Seven-county metropolitan area (Metro Minneapolis–Saint Paul):
  • Minimum contribution: $2,500
  • Maximums by size/receipts:
  • Up to 25 FTE or $500,000 receipts: up to $50,000 loan
  • More than 25 up to 50 FTE or up to $1,000,000 receipts: up to $75,000 loan
  • More than 50 up to 201 FTE or up to $2,000,000 receipts: up to $200,000 loan

Use of loan funds

• Loans may only be used for business purposes within Minnesota.
• Loans may not be used to consolidate, repay, or refinance debt incurred before December 1, 2025, nor for real estate investment or speculative purposes.

Repayment and forgiveness

• Deferred payments: repayments begin no later than three months after a loan is awarded.
• Forgiveness schedule (if lender criteria are met, including borrower staying current on payments):
  • Up to 50% forgiveness after at least two years.
  • Up to 75% forgiveness after at least three years.
  • Up to 100% forgiveness after at least five years.

Reporting and accountability

• Lenders (Minnesota Initiative Foundations and others) must provide quarterly reports to DEED about loans, including business descriptions, loan activity, sources and amounts collected and distributed, program assets and liabilities, and administrative expenses.
• By June 30, 2028, the Commissioner of DEED must compile a report detailing the use of funds and submit it to the chairs and ranking minority members of the Senate and House committees with jurisdiction over economic development.

Significance and changes to law

• Creates a new targeted loan program within the state’s economic development framework to aid businesses affected by immigration-enforcement-related disruptions.
• Establishes separate funding streams for Greater Minnesota and the seven-county metro area and designates partnerships with foundations and nonprofit lenders to administer the program.
• Sets a hard onetime appropriation, a sunset-like deadline for fund use (June 30, 2028), and explicit forgiveness provisions for eligible borrowers.

What this bill aims to accomplish

• Rebuild and stabilize Minnesota businesses facing revenue losses linked to immigration enforcement activities.
• Protect jobs and support ongoing economic recovery in affected areas.
• Provide a structured, time-limited financial support mechanism with clear eligibility, loan terms, and accountability.

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Relevant Terms - Minnesota business recovery loan program - Minnesota Forward Fund - Small Business Emergency Loan Account - Special revenue fund (Minnesota Statutes section 116M.18, subd. 9) - Minnesota Initiative Foundations - Zero-interest loans - Greater Minnesota - Seven-county metropolitan area - Immigration enforcement - Permanent resident - Good standing (Secretary of State, Department of Revenue) - DEED (Department of Employment and Economic Development) - Administrative costs cap (8%) - Onetime appropriation - June 30, 2028 - Revenue loss greater than 30% - Deferred payments - Forgiveness schedule (2 years, 3 years, 5 years) - Quarterly reporting - Final report to legislative chairs and minority members