The City of Cottage Grove Economic Development Authority (EDA) has established a fund to provide forgivable, no-interest loans of up to $10,000 to assist eligible small businesses impacted by COVID-19 pandemic. The purpose of these funds is to ensure the preservation of employment opportunities in the City of Cottage Grove through the prevention of business closures to promote long-term economic vitality in the community.
Grant funds will be available on a lottery system and the application period will be open until June 17th at 4:30 pm. The program is subject to funding availability from the EDA. The EDA retains the authority and discretion to approve or deny an application, and reserves the right to subsequently add further priorities, change eligibility criteria, or discontinue the program in response to changing circumstances.
To be eligible to receive Small Business Emergency Assistance funds, a business must demonstrate that its operations have been directly and adversely affected by the COVID-19 Health Pandemic and/or that it operates in a category named in Executive Orders 20-04 and 20-08. All applicants must meet the following criteria:
1. Eligible business types include locally owned and operated businesses noted in Executive Orders 20-04 and 20-08, such as listed below.
• Restaurants, cafes, coffeehouses, and other places of public accommodation offering food or beverage for on-premises consumption.
• Taverns, brew pubs, microbreweries, distilleries, wineries, tasting rooms, and other places of public accommodation offering alcoholic beverages for on premises consumption.
• Gymnasiums, fitness centers, indoor sports facilities, indoor exercise facilities, exercise studios, businesses offering massage therapy or similar body work, spas, salons, nail salons, cosmetology salons, and barber shops. This includes, but is not limited to, all salons and shops licensed by the Minnesota Board of Cosmetologist Examiners and the Minnesota Board of Barber Examiners.
• Art and music studios.
• Bowling alleys, skating rinks, and other similar recreational or entertainment facilities
• Other businesses deemed non-essential under Executive Orders.
• Other businesses as approved by the EDA.
2. The business shall have a physical address (proof of address required) within the city (and not located in a residential neighborhood) and have been operating within the city long enough to demonstrate financial viability.
3. The business shall employ between 3 and 70 Full Time Equivalent (FTE) employees prior to the issuance of the State of Minnesota Emergency Executive Order 20-04 (March 16, 2020) and make $3.5 million or less in annual gross revenue. Businesses with less than 3 employees will be considered on a case-by-case basis.
4. The business must have been in operation for a least one year prior to March 1, 2020.
5. All businesses must serve the general public and be a conforming use under the current zoning regulations of the city, must not be in violation of the city’s zoning code, and must not have any delinquent taxes, bills, or charges due to the city;
6. Applicants are strongly encouraged to claim all applicable private and public insurance and utilize all other sources of applicable assistance available from other private and public sources, including but not limited to requests for rent/mortgage, utility and/or loan deferrals/forgiveness. Applicants must supply evidence that they have applied for Federal and State disaster financial assistance through the Small Business Administration (SBA) and Small Business Emergency Loan through the Minnesota Department of Employment and Economic Development (DEED) prior to applying for this grant.
Assistance cannot be provided to businesses or non-profits that:
• Do not have a physical address within the City of Cottage Grove
• Non-profit organizations.
• Self-employed, independent contractors, or businesses with no employees other than an owner(s).
• Corporate chains, multi-state chains.
• Businesses in default conditions prior to February 29, 2020.
• Derive income from passive investments without operational ties to operating businesses or whose primary source of revenue is from business-to-business transactions; real estate transactions; property rentals or property management; billboards; or lobbying.
• Primarily generate income from gambling activities.
• Generate any part of its income from adult-oriented or tobacco/vaping-related activities.
• Have no current or historical financial statements.
• Previously received emergency funds from the city.
1. Amount: Business may apply for a one-time emergency grant award not to exceed $10,000. Staff will review each applicant’s request for loan funds to determine the level of assistance that will be provided.
2. Uses: Funds can be used exclusively for working capital purposes defined a paying fixed debts, current payroll, accounts payable, taxes and paying direct business-related bills such as rent, mortgage, or utility fees and other critical business expenses that can’t be paid as a direct result of the current health emergency. Awarded funds may not be used for businessowner’s/manager’s personal uses or expenses.
3. Term: All grant funds must be utilized within two months of the loan agreement being fully executed.
4. Proof of Need: All applicants must demonstrate financial need for grant funds prior to approval. This includes but is not limited to the previous year’s annual gross revenue, average monthly gross revenue prior to COVID-19, and projected monthly gross revenue for the next three months. Additionally, applicants are required to provide evidence of application submittal, acceptance, approval and/or denial of State and Federal emergency financing programs. This could simply include an email response from these agencies.
5. Proof of Expenses: Applicant shall provide proof of eligible expense requested to be paid with grant funds. This includes, but is not limited to current payroll, unpaid invoices, mortgage principal and interest, rent, utility payments, property taxes and/or other unpaid business-related expenses.
6. Disbursement of Funds: Funds shall be distributed within two weeks after a loan agreement has been executed by all required parties.
7. Termination: The EDA retains the right to terminate any agreement under the Emergency Assistance Program if a grant recipient is found to be in violation of any conditions set forth in the grant guidelines or grant agreement.
8. Right to Deny: The EDA retains the right to deny any application for grant funding.
9. Grant Agreement: Upon an applicant being awarded funds, the grant recipient shall enter into a grant agreement with the Cottage Grove EDA. Funds will not be distributed for ay award until the applicant provides proof of expenses and a grant agreement with the Cottage Grove EDA has been executed by all required parties.
10. Reporting: As a condition for receiving grant funding, all grant recipients are required to submit a brief report to the EDA within two months after receiving grant funds, specifying how the entirety of the grant funds were utilized and providing evidence in the form of paid invoices, statements, or similar documentation.
11. Funding Availability: The Small Business Emergency Assistance program has limited amount of funds available. Funds are awarded via a lottery system after the one week application period is closed or until the earlier of the date the fund is exhausted, or the city-declared state of emergency declaration is lifted.
12. Indemnification: All grant recipients shall be required to indemnify the City of Cottage Grove, the Cottage Grove EDA, and any officers acting on their behalf.
Prior to applying, please review the Program Guidelines to determine if your business is eligible.
1. The application is available here.
2. Application requirements will include:
3. Fully completed and e-signed applications along with required documents may be submitted online to: (Email Address). Hard copies will not be accepted.
4. Upon submission of application, applicants will receive am email confirmation receipt of application.
5. The application will be reviewed for eligibility upon receipt. If additional information or documentation is necessary EDA staff will contact the applicant. Due to an expected high volume of applications, you may consider your applications complete if staff does not request additional information within 5 business days after application acceptance.
6. Funds will be distributed on a lottery system.
If you have any questions or need assistance completing the grant application, please contact:
Christine Costello, Economic Development Director
City of Cottage Grove
If application is approved and funds are available, businesses will be notified within 10 business days and provided with an electronic grant agreement for signature.
Funds shall be distributed within one to two weeks after a grant agreement has been executed by all required parties depending on how grant recipients elect to receive funds.
Small businesses receiving funds must commit to using the funds for eligible program expense and must agree to document and report specific uses of the funds. Accordingly, all grant recipients are required to submit a brief report to the Cottage Grove EDA within two months after receipt of funds, specifying how the entirety of the funds were utilized and providing evidence in the form of paid invoices, statements, or similar documentation (see sample report form attached).
Follow-Up and Additional Resources
For businesses needing additional resources such as technical assistance, larger working capital loans, or other, staff will provide ongoing assistance to businesses of all sizes and types, working with partners and other levels of government to access resources available, such as SBA and State of Minnesota DEED loans.
Staff will conduct check-in with grant recipients within one year of the distribution of funds to learn the effect of the grant and business outcomes such as economic impact of the grant program, (including, but not limited to, employees retained or rehired, and sales) and whether they match the program’s desired outcomes of business and/or job retention.