The city of St. Peter gave another boost to local small businesses with two new programs in December and January, giving out hundreds of thousands in loans and grants.
In early December, the Economic Development Authority recommended, and the City Council approved, a new loan and grant program for businesses in the hospitality industry, plus the reopening of a loan program for other small businesses in the community. City Administrator Todd Prafke confirmed that, by mid-January, the city had distributed about $280,000 in loans through the the second round of the COVID-19 Micro Loan Program, plus over $450,000 in loans and grants through the brand new COVID-19 Hospitality Assistance Program.
The COVID-19 Hospitality Assistance Program provides up to $10,000 0% interest loans plus $6,500 grants to eligible St. Peter restaurants, bars, clubs/lodges, fitness/health clubs and places of public assembly. Most other small businesses were able to qualify for the second edition of the COVID-19 Micro Loan Program, which offers just the $10,000 0% interest loans.
This is the second time the city has financially assisted local businesses during the pandemic.
In the late spring and early summer, when the city first opened its COVID-19 micro loan program, a number of businesses immediately jumped on board, taking the $10,000 emergency loans, with payment deferred until 2021. The program was popular enough, in fact, that the EDA and council agreed to expand it to include more businesses … twice.
In the end, $491,652 was taken from the EDA’s revolving loan fund and distributed to businesses through the program. The city then received over $900,000 through federal CARES Act funding for pandemic-related expenses, and it used those funds to convert the micro loans into grants.
The loans-turned-grants were a boon to local businesses, many of which had been struggling.
“Yeah, that definitely helped,” said Eber Noe Juarez, owner of El Agave in St. Peter and Fairmont. “Anything helps, you know, and that helped a lot. We put that money into anything that counts as payment — paying employees especially, because we have to keep them on.”
After Gov. Tim Walz issued Executive Order No. 20-99 on Wednesday, Nov. 18, effective Nov. 20, the hospitality industry closed its doors, leaving just takeout and/or delivery options for restaurants and bars. The executive order, which came after a surge of COVID-19 cases and deaths across the state, lasted until January.
The new COVID-19 Hospitality Assistance Program from the city of St. Peter offered some needed reprieve for hospitality businesses in St. Peter. About 30 businesses in town were eligible to receive a maximum $10,000 loan with 0% interest and with payment deferred until Jan. 1, 2022. On top of that loan, the hospitality businesses were then eligible for a grant at 65% of the loan amount ($6,500 maximum).
About 50 other businesses, meanwhile, were eligible for the second edition of the COVID-19 Micro Loan Program, which offers just the $10,000 loans, with the same parameters as the first edition of the program offered in spring/summer 2020.
The funds for both programs come from the EDA’s revolving loan fund. It’s possible the loans could convert to grants, like they did the first time, if the city received more federal relief dollars, but there is no guarantee on that.
City Administrator Todd Prafke said the revolving loan fund has a little over $3 million in it, but over half of that had already been loaned out. So the funding for the new business assistance programs was taken from the remaining $1.5 million liquid. Though it’s called a “loan fund,” grants are also allowed under state statute.