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Whitmer Announces Michigan Awarded Millions to Support Small Businesses
May 19, 2022
FOR IMMEDIATE RELEASE
May 19, 2022
Gov. Whitmer Announces Michigan Awarded More than $236 Million to Support Small Businesses, Create Jobs and Grow Michigan’s Economy
LANSING, Mich. – Today, Governor Gretchen Whitmer joined the Michigan Economic Development Corporation (MEDC) to announce that Michigan has been approved for up to $236,990,950 in State Small Business Credit Initiative (SSBCI) funding from the U.S. Department of Treasury.
“Ensuring small businesses can thrive and create good-paying jobs in every region of Michigan is critical as we continue growing our economy, driving down unemployment, and uplifting working families,” said Governor Whitmer. “Small businesses form the backbone of Michigan’s economy. Recent data shows that entrepreneurs are fired up, starting tens of thousands of businesses and creating nearly 170,000 jobs just in the first three quarters of 2021. Today’s SSBCI funding will empower economically disadvantaged entrepreneurs and small businesses with timely financing to grow their business and create more jobs.”
Michigan is one of only five states to be approved for funding through this round of SSBCI awards, which are intended to increase access to capital and promote entrepreneurship.
In January, the Michigan Strategic Fund board approved the State Small Business Credit Initiative (SSBCI 2.0) Michigan Business Growth Fund 2.0 programs and guidelines to access a minimum of $215.7 million in federal funding allocated to Michigan in 2021 through an American Recovery Plan allocation.
SSBCI 2.0 is designed to increase the availability of capital to small businesses through loans and equity investments that would otherwise not be available in the market through conventional terms. The program requires partnership with private sector lenders, equity investors, and technical assistance providers.
Michigan’s SSBCI 2.0 programs include new requirements for support to small businesses owned by socially and economically disadvantaged individuals (SEDI) and to very small businesses, defined as businesses having 10 employees or less to continue to ensure equity in access to capital for businesses across the state. In addition to continuing to support manufacturing and adding an emphasis on SEDI and small business lending, the programs will now offer support for early stage funding and technical assistance programming.
The Michigan Strategic Fund is expected to receive the first round of the SSBCI funding – approximately $72 million – in the next 30 to 60 days. Lenders interested in supporting borrowers through the collateral support and loan participation program may begin contacting MEDC Capital Access immediately related to those programs at firstname.lastname@example.org. CDFIs and small business lenders seeking support through the loan guarantee support may also begin contacting MEDC Capital Access immediately. MEDC is anticipated to announce an open application to venture capital funds at some point this summer. Small businesses seeking new financing should contact their local bank, credit union, or CDFI to discuss possible financing including SSBCI support.
“As we work to bolster our economic recovery, we must ensure that Michigan small businesses have the resources they need to stay afloat,” said U.S. Senator Gary Peters. “This funding will directly help our small business community create jobs, adapt operations and support local economies across our state. The State Small Business Credit Initiative is a proven success, and I’m pleased that the program I helped champion will continue to support businesses right here in Michigan.”
SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, amplifying the effects of this funding and providing small business owners with the resources they need for sustained growth. State governments submitted plans to Treasury for how they will use their SSBCI allocation to provide funding to small businesses, including through venture capital programs, loan participation programs, loan guarantee programs, collateral support programs, and capital access programs.
“These investments through the American Rescue Plan will support key Michigan industries, including advanced manufacturing, and expand access to capital for entrepreneurs and business owners,” said Deputy Secretary of the U.S. Treasury Wally Adeyemo. “Treasury will continue working with Michigan to help make sure that this funding is having maximum impact across the state to promote economic growth.”
A White House report released earlier this month found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20% more than any other year on record. It also found that small businesses are creating more jobs than ever before, with businesses with fewer than 50 workers creating 1.9 million jobs in the first three quarters of 2021 – the highest rate of small business job creation ever recorded in a single year.
“The State Small Business Credit Initiative is another exciting and critical investment that will help Michigan achieve the goals set out in Governor Whitmer’s MI New Economy plan to grow small business jobs, revenue, household income and venture capital funding,” said Susan Corbin, Director of the Michigan Department of Labor and Economic Opportunity. “Michigan is committed to leading the way in efforts that increase equitable access to small businesses and business owners from all backgrounds.”
The investments being made through SSBCI are a key part of the Biden Administration’s strategy to keep the small business boom going by expanding access to capital and by providing entrepreneurs the resources they need to succeed. The work Treasury has done through the implementation process to ensure SSBCI funds reach traditionally underserved small businesses and entrepreneurs will also be critical to ensuring the small business boom not only continues but also continues to lift up communities disproportionately impacted by the pandemic.
“Our small businesses are the backbone of our nation’s economy, and here in Michigan, we’re committed to doing all we can to provide the support, resources and opportunities they need to grow and thrive,” said Quentin L. Messer, Jr., CEO of the Michigan Economic Development Corporation. “We’re grateful and proud to be among the first states to receive this critical allocation and appreciate the steadfast partnership of Senator Peters, Senator Stabenow and the entire Whitmer-Gilchrist Administration in securing this additional SSBCI funding. This approved application only continues the work. We look forward to building on this progress over the coming year as we lift up small businesses throughout Michigan.”