Minnesota snow-dependent businesses now eligible for federal disaster loans after warm winter

The warmest winter on record in Minnesota has been economically “catastrophic” for some businesses around the state, Gov. Tim Walz said Monday as he encouraged small businesses adversely affected by the dearth of snow to apply for federal disaster loans usually reserved for farmers.

State officials in Minnesota, as well as in Michigan and Wisconsin, reached out to the U.S. Small Business Administration (SBA) to open up its economic injury disaster loans for droughts to businesses such as resorts that rely on ice fishing and snowmobiling, snow-removal services and other winter-related enterprises.

“We asked the SBA to try and be creative on this,” Walz said at a news conference on Monday. “They did it.”

Brian McDonald, a Minnesota director for the SBA, said this is the first time he’s aware of these loans being used in this way.

“This is unprecedented,” he said.

Under the loan program, businesses can borrow up to $2 million to cover their actual losses and won’t have to pay interest on the loan for the first year, and a maximum rate of 4% after that. The loans are available for businesses in 81 of the state’s 87 counties, where there are ongoing federal drought declarations.

The loans are not intended to replace lost sales or profits, he added, but can be used for debt, payroll and other bills that could have been paid had it not been for the mild winter. The deadlines vary depending on the county, but begin later this month and go through June.

Maple Plain-based Scott’s Lawn Care usually has at least 10 snowfalls every winter that become “full plow events” for the company, said owner Scott Hartmann. But this winter, it only had one.

That resulted in a 40% loss in revenue and laying off 16 workers, or nearly half of his 37 full-time employees.

“As I look back to when I started Scott’s Lawn Care as a high school student in 1996, no winter has come close to being this scarce,” he said.

The Loppet Foundation’s energy costs doubled this winter as it worked hard to provide a trail in Theodore Wirth Park that was used for a World Cup cross-country skiing event, said Claire Wilson, the group’s executive director.

“We planned for a low snow year,” she said. “But we did not plan for a snow drought in addition to a year where we could not make snow, where the temperatures were not low enough for us to do that.”

In addition, the Loppet had 53% fewer participants in its ski lessons and school programs this winter.

It all added up to a near $1 million gap for her organization, she said.

“We want to be here when winter returns,” she added.