NEW ULM — An additional $40,000 was allocated to the New Ulm Economic Development Authority’s Small Business Incentive Grant on Tuesday, bringing the total grant amount to $100,000 for 2022.
The Small Business Incentive grant program launched in 2019 is designed to support new small businesses in New Ulm with their start-up expenses in their first year of operation. The grant reimburses owners for eligible expenses up to $10,000 per business.
In a typical year, the EDA allocates $50,000 to this program and funds five new small businesses, but there was a surge in demand in 2022. Six grant applications had already been submitted in January. The EDA agreed to allocate an additional $10,000 for the sixth request.
EDA coordinator Heather Bregel said new grant applications continued to pour in, forcing a waiting list. There are currently eight companies on the waiting list.
Of the eight businesses, four have already opened. For a business to be eligible, it must have been open for at least three months.
Bregel recommended allocating the additional $40,000 to the four companies currently open.
Several types of businesses received grants this year, including salons, event center, kennel and others. Bregel said there is no trend in the type of small businesses that are opening.
One of the new businesses funded by this additional allowance was a day care centre. The EDA has been working to expand child care in New Ulm because there is a nationwide shortage.
Board Chairman Daniel Braam asked if the waiting list was that long next year, would all funds be announced in January.
Bregel confirmed that the bulk of next year’s $50,000 would likely be allocated before the start of the year.
Board members wondered why 2022 had seen such a spike in new small business start-ups. Bregel thought the COVID pandemic shutdown gave people time to reevaluate what they were doing, and many decided to start their own businesses.
Braam agreed, saying he heard from several people who found extra time during the shutdown to pursue different business interests.
Since the program launched in 2019, the grant has been awarded to 19 companies. All businesses that receive the grant are still open, meaning the program has a 100% success rate.
Jessica Janni, Board Member, moved approval of the additional $40,000 allocation, which was approved unanimously.