Michigan small businesses are the first ones in the country to tap into public-private loan program. The mission of Michigan businesses is to encourage investment in clean energy and areas that are economically distressed. Karen Mills – SBA head, Andrew Liveris – Dow Chemical Co. chief, Rick Snyder – Michigan Gov. and others announced the $130 million impact investment program. Over a period of time, private and public funds will be made available in five years and it is part of a broader effort to make $1 billion available nationally.
This initiative is going to work with private institutional investors and it will help them identify and make money available to private equity fund managers so as to help them invest in targeted companies. Dow currently is investing $15 million while $35 million is invested from state retirement and Natural Resources Trust fund. Remaining of $80 million is derived from SBA and it is going to cost taxpayers very little as the loans will be repaid along with interest.
The Start-Up America initiative is another way to make Dow’s customers and suppliers gain access to capital that will eventually help them grow. This is a good investment for the Midland-based companies. Since things are getting started in Michigan, it is definitely a national initiative.
The program is meant for established businesses and is not really aimed at startups. Established businesses facing trouble to find finance for expansion or to conduct research and development can apply for this loan program. Money will be distributed to companies that have a significant presence and are planning to relocate to Michigan. Loans must be paid back with 4 percent interest rate and certain fees. Every company is found eligible for $5 million to $15 million.
Mills says,“Many of the high-growth firms in Michigan simply need more capital to grow, scale up and hire.” The private and public funds will allow pumping in more money in small businesses of Michigan.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to