NEW ULM — An additional $40,000 was allocated Tuesday to the New Ulm Economic Development Authority’s Small Business Incentive Grant, bringing the total grant amount to $100,000 for 2022.
The Small Business Incentive grant program started in 2019 is designed to support new small businesses in New Ulm with their startup expenses during 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 has been a sharp increase in demand in 2022. Six applications for the grants were already submitted by January. The EDA agreed to allocate an additional $10,000 for the sixth request.
EDA Coordinator Heather Bregel said additional applications for the grant continued to come in, forcing the creation of a waiting list. There are currently eight businesses on the waiting list.
Of the eight businesses, four have opened already. For a business to be eligible, it must be open for at least three months.
Bregel recommended allocating the additional $40,000 for the four businesses currently open.
Several different types of businesses have received grants this year including salons, event center, dog kennel and others. Bregel said there was no trend in the type of small businesses that are opening.
One of the new businesses funded by this additional allotment was a day care center. The EDA has been working to expand day care in New Ulm, as there is a nationwide shortage.
Board chairman Daniel Braam asked if the waiting list was this long next year, would all the funds be spoken for in January.
Bregel confirmed most of next year’s $50,000 was likely to be earmarked before the year started.
Board members wondered why 2022 saw such a spike in new small businesses starting. Bregel believed 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 multiple people who found additional time during the shutdown to pursue different business interests.
Since the program started in 2019, the grant has gone to 19 businesses. Every business to receive the grant is still open, meaning the program has a 100% success rate.
Board member Jessica Janni made the motion to approve the additional $40,000 allotment, which was unanimously approved.