Lawmakers propose maintaining increased funding level for entrepreneurs support program

A small events center, a 500-head goat farm, and a day care center tailored to children with autism are among the small businesses recently launched in Minnesota. While these entrepreneurs have identified unique niches, running a successful business also requires expertise in areas like bookkeeping, cash flow, marketing and financial management.

The Department of Employment and Economic Development’s Small Business Assistance Partnerships Program aims to provide that critical support. By funding nonprofit community development organizations, the program offers access to capital and technical assistance, particularly for individuals without a business background.

Rep. Wayne Johnson (R-Cottage Grove) sponsors HF1965, which proposes an annual appropriation of $6.4 million for the program. The House Workforce, Labor, and Economic Development Finance and Policy Committee laid the bill over Thursday for possible inclusion in a larger bill.

“One of the toughest things for entrepreneurs is going from the field into the office,” Johnson said. “The more businesses we can help create and succeed, the better for Minnesota.”

Base funding for the program now stands at $5.45 million per biennium, but it received a boost to $12.8 million for fiscal years 2024-2025. The bill seeks to maintain funding at that elevated level.

The Minnesota Consortium of Community Developers reported that the program assisted nearly 16,500 businesses and created or retained more than 20,000 jobs in 2023.

Lee Hall is CEO of NextStage, a nonprofit whose mission is to “support entrepreneurs at every stage,” according to its website. He said 30 years in his role as business advisor have demonstrated to him the steep learning curve required for success. He said the state has set up several organizations to support entrepreneurs and encouraged legislators to maintain the funding and maintain the workforce.

Economic Development Association of Minnesota President Eric Maass agrees. “If Minnesota wants to continue to foster a thriving small business ecosystem, the state should continue to provide key supports for those businesses through appropriate investments in the Small Business Assistance Partnerships Program,” he wrote.

Rep. Dave Pinto (DFL-St. Paul) said the Small Business Assistance Partnerships Program is a model worth following, with competitive grants awarded by DEED going to nonprofits.