Millions in PROMISE Act grants still unclaimed in Twin Cities

People are afraid.

That's why nearly seven months after the original application deadline passed, Minneapolis and St. Paul small businesses can still apply for Minnesota PROMISE Act grants. Millions of dollars remain available.

The second round of the grant program was originally scheduled to close Dec. 14, 2025, but applications are now being accepted on a rolling basis until the remaining funds are exhausted.

Neighborhood Development Center headquarters in St. Paul. The organization says millions in PROMISE Act small business grants remain unclaimed as applications continue on a rolling basis. Photo: Becca Gilbuena

For the Neighborhood Development Center (NDC), the nonprofit administering the grants in Minneapolis and St. Paul, the extended application period reflects a challenge it didn't anticipate.

"We have $60 million to distribute by June 30, 2027," said Shahir Ahmed, NDC's chief program and innovation officer. "The money is there."

Ahmed said many eligible entrepreneurs have become hesitant to participate amid heightened scrutiny of state grant programs, years of headlines about fraud and a broader climate of distrust toward government.

"We can't get the dollars out because people are traumatized and don't trust," he said.  "When you have the optics of fraud, waste and abuse, and you're targeting specific types of communities, it becomes a cesspool of fear, withdrawal and lack of trust in the state and in entities like ourselves."

Balancing access and accountability

The Minnesota PROMISE Act was approved by lawmakers in 2023 to help small businesses with annual revenues under $750,000 recover from the lasting impacts of the COVID-19 pandemic and the civil unrest following George Floyd's murder.

NDC was selected to administer grants in Minneapolis and St. Paul because of its decades-long work supporting entrepreneurs through business training, technical assistance and lending.

According to the Minnesota Department of Employment and Economic Development (DEED), NDC processed more than 3,700 applications during the program's first funding round and awarded 651 grants totaling nearly $9.6 million, more than any other administering partner. Statewide, a bit more than $22 million has been approved, leaving tens of millions of dollars still available.

Shahir Ahmed, chief program and innovation officer at the Neighborhood Development Center, which administers Minnesota’s PROMISE Act grants in Minneapolis and St. Paul. Photo: Shahir Ahmed

The program has also drawn increased scrutiny. Earlier this year, a KSTP investigation raised questions about whether some grant recipients met eligibility requirements, prompting calls from some lawmakers for additional oversight.

Ahmed testified before a House committee in March as legislators questioned the program's administration. He said NDC anticipated fraud attempts from the outset, particularly in the wake of the Feeding Our Future scandal, and built additional safeguards into its application process.

"The attempts of fraud happen in every program," Ahmed said.

At the time of his testimony, Ahmed said NDC had identified nearly three dozen suspicious applications and referred them to the state for review.

When fear becomes a barrier

While Ahmed supports strong oversight, he said the public conversation around fraud has overshadowed the purpose of the program. He said Operation Metro Surge has further deepened fear among some entrepreneurs who are reluctant to share personal information through any government-affiliated program.

"As a service provider, we watched our clients withdraw and retreat," he said. "They were reluctant to participate because of, 'Where is my information going? Who's getting my information?'"

What the grants have made possible

Despite those concerns, businesses that have received PROMISE Act grants say the funding has helped stabilize neighborhood institutions and create opportunities for others.

On St. Paul's East Side, Monarch Montessori School used its grant to expand tuition assistance, strengthen employee benefits and invest in classroom materials. 

“The PROMISE Grant gave us not only essential financial support but also the security to keep serving the families of the Payne/Phalen neighborhood with the stability, consistency, and care they deserve,” shared school leaders.

In Uptown Minneapolis, Bonita's Extensions & Braids plans to use its grant to strengthen its apprenticeship program for aspiring hairstylists. 

“With better resources, we can continue preparing new stylists for lasting careers, while giving our community access to skilled professionals and a trusted space for natural haircare,” said Bonita’s owner, Afolakemi Lawani.

Another recipient, the Arcade Bar in St. Paul, said PROMISE Act funding is helping preserve a neighborhood gathering place that has served the community for more than five decades while adapting to rising operating costs.

Ahmed hopes stories like those encourage more eligible entrepreneurs to apply before the program expires in June 2027.

"The promise hasn't been fulfilled," he said. "Our goal is to get every dollar out."

Applications for Round 2 of the PROMISE Act remain open on a rolling basis for eligible businesses until available funding is exhausted.