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Michigan launches public-private partnership that will provide micro loans to state's small businesses
November 04, 2013
DETROIT, Mich. – Gov. Rick Snyder today helped launch a new micro lending program led by Huntington Bank and the Michigan Economic Development Corporation that will provide loans to growing companies across Michigan.
“This is the kind of innovative effort and collaboration that will help build a stronger Michigan and generate job growth by supporting small businesses and our state’s budding entrepreneurs.” Snyder said. “I am confident that early success in Detroit will quickly generate momentum in this initiative that activates further community partnerships and economic activity around the state.”
The Pure Michigan Micro Lending Initiative will launch with an initial $5 million commitment by Huntington Bank for a pilot program in Detroit. The funds will be allocated as a loan to Detroit Development Fund, a nonprofit micro lender based in Detroit.
DDF will lead a collaborative of micro lending partners, including the Detroit Micro Enterprise Fund, the Michigan Women’s Foundation and Lifeline Business Consulting Services, to provide loans and services to the target market – primarily women- and minority-owned small and micro businesses in Detroit.
“Detroit is an ideal place to launch our new partnership with Michigan to help maximize neighborhood-by-neighborhood investment in the city,” said Mike Fezzey, Huntington’s East Michigan president. “Huntington welcomes other banks to become involved as lending pool funders in Detroit and join us in the startup of additional Pure Michigan Micro Lending programs in other communities.”
MEDC will provide initial credit reserves in support of the program, enabling up to $225 million in further bank partner funding for additional micro loans across the state. Upon successful completion of the pilot program, Huntington will commit an additional $20 million to distribute through lines of credit to participating community micro lenders.
“Increased lending availability for small business opportunities that might otherwise go unfulfilled will significantly add to our toolkit to grow Michigan’s economy,” MEDC President and CEO Michael A. Finney said. “This innovative public-private partnership demonstrates a steadfast commitment to our common goal of helping Michigan’s small businesses move forward and grow and, in turn, bring jobs and investment to our state.”
Huntington Bank approached MEDC about possible interest in micro loans several months ago, at a time with MEDC was planning to create a micro loan support program. In October, MEDC received Michigan Strategic Fund approval for the Small Business Loan Program, which will fund loan loss reserve accounts at participating banks that lend to qualified micro lenders to increase access to capital for small and micro businesses.
The federal government also played a role in the creation of the micro lending program. The U.S. Treasury Department on Friday signed off on using SSBCI funds to support the state's portion of the initiative.
“Today’s announcement is an example of the private sector, local organizations, the State of Michigan and the Federal government coming together to support economic revitalization in Detroit,” said Don Graves, deputy assistant secretary of the U.S. Treasury Department. “Through the Treasury Department’s State Small Business Credit Initiative, federal funds are playing an active role in supporting Detroit’s entrepreneurs so they can grow their businesses and create jobs.”
Today’s announcement was made in Detroit at E & S Uniforms and Apparel, a small business that launched in September with the help of micro lending support from the Detroit Development Fund and other community micro lending sources.
“The micro loans from the Detroit Development Fund and the Michigan Women’s Foundation are the step ladder that allowed my family to get to the next step in realizing our dream of becoming business owners,” said Sinom Page, co-owner of E & S Uniforms and Apparel.
Huntington Bank was also a founding partner in MEDC’s Pure Michigan Business Connect, committing $2 billion in lending for commercial and small Michigan-based companies.
Launched in 2011, PureMichiganBusiness Connect is a public-private allianceof theMEDC, state agencies andmajorMichigancompanies andorganizations that connects in-statecompanies to business resources.