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Minneapolis Mayor Jacob Frey unveiled Friday a plan to give $5 million in assistance to tenants and small businesses struggling with the financial fallout of the coronavirus pandemic.

The plan sets aside roughly $3 million for rental assistance and $2 million in loans for small businesses, though they are only forgivable for companies located in a part of the city already targeted for special assistance.

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“We are not under the impression that the $5 million in assistance is a cure-all,” Frey told City Council members at a meeting Friday morning. “Sadly, we do not have the finances at the city to provide a cure-all without assistance from our federal and state partners.”

The mayor said he hopes the programs — collectively called the Gap Funding Plan — will help cover needs that aren’t met by state and federal aid. The city will not consider immigration status in determining individuals’ eligibility for help, Frey said.

The city expects to roll out applications for the programs in the coming weeks, with the money coming out very shortly afterward.

The city’s emergency assistance program will offer payments up to $1,500 for rent and utilities, with some households receiving $2,000 “under extraordinary circumstances,” the mayor told council members.

To qualify, families must live in Minneapolis, make 30% or less of the area median income — roughly $27,000 for a family of three — and have experienced “a significant loss of income ... due to COVID-19.”

To pay for that, the city is using money from the Affordable Housing Trust Fund, as well as money that was freed up when the city got additional federal grant money.

The city is also dedicating $1 million within the existing Stable Homes, Stable Schools housing stability fund to help families struggling with homelessness or housing instability during the pandemic. In most cases, payments would be limited to $1,500 per household. To qualify, families would need to have at least one child enrolled in an elementary school in Minneapolis Public Schools and make 50% or less of the area median income — about $45,000 for a family of three.

For both programs, payments would go directly to the property owner or to a utility company if some of the money is needed to pay bills.

The plan also calls for the city to allocate $2.2 million for small businesses with 20 or fewer employees and people who are self-employed.

The city will offer forgivable no-interest loans ranging from $5,000 to $10,000, depending on their pandemic-related needs. The money can be used to help cover payroll and employee benefits, rent or mortgage payments and other “critical working capital needs.” Payments will not be required for the first 12 months, and the debt will eventually be forgiven if the businesses meet certain criteria, such as remaining in Minneapolis and staying open.

To qualify, the businesses must make $1 million or less in annual revenue and be located in an area designated by the city, such as Cultural Districts, the Promise Zone, Green Zone or areas of concentrated poverty.

Some council members questioned why the geographic boundaries were so strict.

“As soon as I saw the package, I thought those forgivable loans were a great deal,” Council Member Cam Gordon said, rattling off a list of businesses that he initially thought would be eligible.

“I thought, well here’s a great opportunity for them and then I realized when I looked at the boundaries that they would all be excluded, some of them by a block or two.”

Frey and other city officials said they hope that by focusing on businesses in those areas, they can reach people who are likely to be most vulnerable in the economic downturn.

Liz Navratil • 612-673-4994