The Covid-19 pandemic has caused economic dislocation for
many member companies resulting in business slowing, cash flow challenges, and
the need for bridge financing. The following document outlines existing and
pending assistance programs. Medical Alley will provide updated information as
it becomes available.
The federal stimulus legislation has not passed at the time of writing and is subject to change. Once signed into law, it may take three to eight weeks for administrative rule making and we expect large numbers of applicants. We recommend making contingency plans through May.
Existing Assistance Programs
As COVID-19 drives tough decisions, please keep your
employees aware of existing worker benefits.
- Extension of unemployment insurance by 13 weeks
- An increase of $600 per week for four months (in
addition to the amounts paid by the states as a base rate)
- Accessibility for individuals not historically
covered (e.g., independent contractors, the self-employed, gig economy workers,
freelancers, furloughed workers who are still receiving health insurance from
- Projected to cost about $250 billion
Shared Work – Alternative to Layoff
State of Minnesota Stimulus Legislation
The State’s $330 million stimulus package followed two
separate measures of $200 million and $21 million, bringing the state’s total
response to more than $550 million. The latest bill creates a $200 million
COVID response funding that can be used to protect Minnesotans and maintain
state agencies’ operations. Child-care providers, food shelves, and homeless
services will receive additional assistance. Please be aware of the available
options for your business.
Information on the following programs can be found on the
Department of Employment & Economic Development’s (DEED) website here: https://mn.gov/deed/newscenter/covid/employers/
Small Business Loan
- $10,000,000 in FY 2020 from the General Fund.
Here is the small
business loan guarantee program summary from Minnesota House Research:
- Retools an old program, unfunded since 2012, to provide state guarantees of loans to small businesses made within 12 months of the declaration of the COVID-19 peacetime emergency.
- Provides loan guarantees of 80 percent of a loan provided by a lender, up to a limit of $200,000.
- Allows loans to be made by banks, commercial lenders, public entities, and private nonprofit economic development organizations with at least three years of experience actively lending to small businesses.
- Defines small businesses as those that employ the equivalent of 250 full-time workers or less.
- Allows funds to be used primarily for working capital, as well as machinery and equipment and a few other expenses.
Small Business Emergency Loan
$30,000,000 in FY 2020 from Special Revenue Fund. This aid is targeted at businesses directly
impacted by forced closures.
- Directs DEED to develop a forgivable loan
program to award grants to nonprofit corporations to fund forgivable loans to
small businesses (the “Small Business Emergency Loan Program”), regardless of
such business’s organizational form (i.e., independent contractor, sole
proprietorship, limited liability company).
- 0% interest loans during the period of
emergency. The loans will be 50% forgivable.
- If other financing becomes available to small
businesses like federal funding, they must repay the loan.
- Must demonstrate business was adversely affected
by COVID-19, must have claimed all applicable private insurance, and utilized
all other sources of applicable assistance available from other private and
- Loans range from ($2,500-$35,000)
Federal Stimulus Legislation
The Federal government will also be providing several
options available to businesses.
The CARES Act includes $367 billion in support for small
businesses through the newly created Paycheck Protection Program and relaxed
requirements for the Small Business Administration’s (SBA) Economic Injury
Disaster Relief Program.
The Paycheck Protection Program creates a type of loan under
the SBA’s existing program that makes loans through traditional lenders:
- Loans can be used to pay employees, rent,
mortgage and bridge loan interest, and utilities.
- Loan amounts are capped at the lesser of $10M
and 2.5x the total of the employer’s average monthly payroll (typically over
the preceding 12 months, with special calculations for seasonal employers and
businesses that have not been operating for a year).
- The loans will be forgivable, with the principal
amount of the loans forgiven in the amount of up to 8 weeks of payments for the
above expenses. The amount of forgiveness will depend on employee count.
- Interest rates will not exceed 4%, and no
personal guarantees or collateral will be required.
- $10 billion for SBA emergency grants of up to
$10,000, which the SBA must distribute within three days.
- $17 billion for SBA to cover six months of
payments for small businesses with existing SBA loans
- The Act includes a $500 billion emergency loan
program, including loan guarantees and investments, for large businesses and
municipalities suffering from economic distress as a result of the pandemic,
including at least $46B for industry-specific loans (e.g., the airlines):
- Borrowers may not pay dividends or make other
capital distributions with respect to the common stock of the eligible business
for up to a year after the loan is no longer outstanding
- Borrowers must retain 90% of employment levels
as of March 24, 2020, through September 30, 2020
Medical Alley Cost Savings Program
As you plan for the upcoming months, saving and cutting
expenditures is more important than ever. Please take advantage of our Cost
- The Medical Alley Cost
Savings program provides discounted rates on products and services as well
as a negotiating tool with existing suppliers. If you have not reviewed these
offerings, now is a critical time to do so.
- Working with our 18+ partners (including VWR,
UPS, and Office Depot), our members have saved over $15+ million. The average
member saves $30,000/year and many save more than $100,000/year.
The Medical Alley Association is here to support you in these uncertain times. If you have questions, please reach out to our team for assistance.
MAA COVID-19 INFORMATION DISCLAIMER:
The Medical Alley Association is providing COVID-19 related information, including the “COVID-19 Resource Connect” feature on its website and summaries of laws, executive orders, and government programs that may be of interest to members, as a public service. The Medical Alley Association makes no representations, guarantees, or warranties as to the accuracy, completeness, currency, or suitability of the COVID-19 related information provided by the Medical Alley Association on its website, in newsletters, or in any other communications. The Medical Alley Association specifically disclaims any and all liability for any claims or damages that may result from providing COVID-19 related information online or in other communications or linking to third party websites or other sources of information. The Medical Alley Association makes no effort to independently verify, and does not exert editorial control over, information provided by third parties.
The Medical Alley Association does not endorse any of the products, vendors, consultants, or documentation referenced in, or connected to parties through, the COVID-19 Resource Connect feature or via this email or other communications.