New fund aims to help small businesses recover from COVID-19 and civil unrest

New fund aims to help small businesses recover from COVID-19 and civil unrest

2022-07-13T07:29:15-04:00March 24th, 2022|Economy, Minneapolis-St. Paul|

Writer: Caty Hirst

Minneapolis nonprofits2 min read  March 2022 Twin Cities nonprofits have come together to provide low-interest loans to businesses impacted by COVID-19 or damaged during the civil unrest in the wake of the tragic killing of George Floyd by a police officer — raising more than $17 million in funds so far. 

Created by the Catalyst Coalition, the Minnesota Inclusive Growth Fund (MIGF) has a goal to grow the fund to $25 million. The five nonprofits involved in Catalyst are African Economic Development Solutions; Community Reinvestment Fund, USA; Latino Economic Development Center; Metropolitan Economic Development Association (Meda); and the Northside Economic Opportunity Network. 

MIGF will allow small businesses to apply for low-interest loans of up to $200,000 and is targeted to businesses that are “underbanked.” Eligible businesses either employ 20 or fewer full-time employees or have less than $3 million in revenue in 2019. The fund is also supported by the Margaret A. Cargill Foundation, the Bush Foundation, Wells Fargo, Otto Bremer Trust, Target Foundation, McKnight Foundation and Allina Health. 

Jen Ford Reedy, president of the Bush Foundation, is optimistic about the future opportunities and notes that MIGF is a bright spot in new efforts. 

“We are seeing a lot of demand for funding – and often for really exciting collaborative efforts. We see people thinking bigger and thinking differently about impact, taking advantage of the opportunities within our crises,” said Reedy with Invest:. “One example is the Minnesota Inclusive Growth Fund, where several organizations that serve BIPOC entrepreneurs have joined forces to raise money together and work cooperatively toward their shared goals of a more equitably prosperous Minnesota.” 

Reedy said the Bush Foundation has dedicated $50 million to addressing racial wealth gaps through grantmaking, “inspired” by incoming proposals. 

“There are a lot of creative, committed people working very hard to make this region work well for everyone,” she told Invest. 

The collaboration joins the already-underway efforts from community leaders, government officials and area nonprofits to help the local community recover from the dual blows of the pandemic and the civil unrest following the death of Floyd. More than 1,500 Minnesota businesses were damaged during the resulting protests, local news reports show.

The McKnight Foundation, for example, the Minnesota-based family foundation focused on climate change and building an equitable future in the area, has made repairing communities a priority, said Tonya Allen, President of the McKnight Foundation.

“Recently, we have focused much of our time on how we make investments in the cultural corridors, particularly businesses owned by people of color, that were harmed during the uprising after George Floyd’s death,” Allen said in an interview with Invest. “We’re hoping to support those businesses and communities as we redefine and reimagine what these cultural corridors can be. We want to move past the ideation phase and make it a reality. I’m confident that we’ll go from being known as the epicenter of racial injustice to the epicenter of racial opportunity.” 

Nationwide, a report by Axios has pegged the insured property damage between $1 billion to $2 billion. In the Minneapolis–St. Paul area, damage is estimated at $500 million, according to Newsweek. Some areas, like Lake Street, were especially hard hit by the protests, and many businesses were unable to reopen following extensive damage. 

“We encourage Minnesota small businesses impacted by the COVID-19 pandemic or civil unrest to visit and apply now,” said Anisha Murphy, Esq., director of community advancement for Community Reinvestment Fund, USA, in a statement. “By designing and co-creating unique programs like MIGF that combine capital access with small business resource availability, we can help Minnesota small businesses recover and thrive during challenging economic conditions.”