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Published 3/19/2020
2:34pm

Vital Funding for State’s Small Businesses Gains Michigan Strategic Fund Support

Michigan Small Business Relief Program will provide up to $20 million in grants and loans to Michigan’s small businesses impacted by COVID-19 outbreak

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Economic assistance for small businesses around Michigan that have been negatively impacted by the COVID-19 virus gained approval from the Michigan Strategic Fund, the Michigan Economic Development Corporation announced today.

“We understand small businesses across our state are facing unprecedented challenges as we take every step possible to mitigate the spread of coronavirus,” said Governor Gretchen Whitmer. “Through decisive actions like those taken today by the MSF Board to authorize relief for small businesses throughout Michigan, we are leveraging every resource available to support our businesses, communities and entrepreneurs around the state impacted by this outbreak.”

The Michigan Small Business Relief Program approved today authorizes the MEDC provide up to $20 million in support for small businesses. The funding is divided between $10 million in small business grants and $10 million in small business loans to support businesses facing drastic reductions in cash flow and the continued support of their workforce.

The $10 million in grant funding will be provided to local or nonprofit economic development organizations throughout the state to provide grants up to $10,000 each to support certain small businesses that have realized a significant financial hardship as a result of the COVID-19 virus.

In order to qualify for grant support, businesses must meet the following criteria:

• The company is in an industry outlined in Executive Order 2020-9, or any subsequent Executive Order of similar intent (“EO”), or demonstrates it is otherwise affected by the COVID-19 outbreak, as well as meeting additional criteria;

• The company has 50 employees or fewer;

• The company needs working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of business; and

• The company is able to demonstrate an income loss as a result of the EO, or the COVID-19 outbreak.

Additionally, the program authorizes the MEDC to provide up to $10 million for small business loans to one or more Community Development Financial Institutions (“CDFI”) or a licensed SBA not-for-profit institutions (“Eligible SBA Non-Profit”), or directly from the MSF to eligible borrowers to be used to provide low-interest loans with flexible repayment terms to support certain small businesses statewide that have realized a significant financial hardship as a result of the COVID-19 outbreak. Loans to eligible borrowers must be $50,000 or more and are capped at $200,000.

In order to qualify for loan support, businesses must meet the following criteria:

• The company is in an industry outlined in Executive Order 2020-9 (“EO”), or demonstrates it is otherwise affected by the COVID-19 outbreak, or is a company that provides goods and services to companies to the aforementioned;

• The company has fewer than 100 employees;

• The company needs working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of business;

• The company can demonstrate that it is unable to access credit through alternative sources;

• The company can demonstrate an income loss of as a result of Executive Order 2020-9.

The MEDC anticipates that at least 1,100 businesses across the state will benefit from this program.

The Michigan Small Business Relief Program will be a top priority for the MEDC, with funds being available no later than April 1, 2020. Loan and grant proceeds under the Michigan Small Business Relief Program may be used for working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of business. Through this program, in combination with other programs and services, the state will ensure economic support is available to Michigan’s small businesses to overcome anticipated loss of revenue as a result of the COVID-19 virus through both grant and loan opportunities.

“With the outbreak of COVID-19, many small businesses are faced with significant economic impacts, including challenges with cash flow and resources to support their workforce,” said MEDC CEO Mark A. Burton. “The Michigan Small Business Relief program will provide immediate assistance to the small businesses around the state who are facing revenue loss as a result of tough, but necessary steps that have been taken to mitigate the spread of the virus.”

The Michigan Small Business Relief Program is the latest effort of MEDC to support Michigan businesses as they are impacted by COVID-19. MEDC has just launched a new free, statewide online procurement platform for buyers and suppliers of critical health and human services across a broad range of categories to minimize the impact of the virus in the state. The platform will allow health and human service providers in need of critical supplies to connect with suppliers of vital goods and services.

It also builds Governor Whitmer’s application for a U.S. Small Business Administration Economic Injury Disaster Loan (EIDL) declaration to ensure federal economic support is available to Michigan businesses. Earlier this month, Congress passed legislation making $1 billion available to the SBA to provide low-interest loans to small businesses, small agricultural cooperatives and nonprofits that have suffered substantial economic losses due to the COVID-19 outbreak. These loans offer up to $2 million in assistance to support businesses with any temporary loss of revenue they are experiencing due to the outbreak, and will have a significant regional impact for communities across the state as the COVID-19 situation evolves.

For more resources for small businesses in Michigan impacted by COVID-19 visit michiganbusiness.org/covid19.

Information around this outbreak is changing rapidly. The latest information is available at Michigan.gov/Coronavirus and CDC.gov/Coronavirus.  

The Michigan Strategic Fund also took the following actions today:  

Red Cedar Development Project – The City of Lansing Brownfield Redevelopment Authority requested approval of a Brownfield Act 381 Work Plan including $32,453,324 in school tax capture to support a development project on the former Red Cedar Golf Course site in the city of Lansing. As presented by the developers, the plan seeks to build a variety of pads to sell to related entities leaving some ambiguity as to the future development to occur on the site.

The MSF board today voted to deny the request because the development as proposed lacked details necessary to verify the financial need or the regional benefits, and the project generally does not comport with the state’s economic development priorities. The board’s action does not impact the local brownfield authority’s ability to move forward with their partial financing of the project.

Lofts on Alabama LLC amendment – Originally approved in June 2015, the Lofts on Alabama project included the demolition of an existing structure and rehabilitation of an existing building into market-rate apartments and a parking ramp in Grand Rapids. The project today received MSF approval to refinance from a loan participation agreement to a Fannie Mae senior loan and a new direct loan on the balance owed to the MSF. The new financing structure provides more advantageous terms, resulting in more monthly income to cover debt service payments.

About Michigan Economic Development Corporation (MEDC)  

The Michigan Economic Development Corporation is the state’s marketing arm and lead advocate for business development, job awareness and community development with the focus on growing Michigan’s economy. For more information on the MEDC and our initiatives, visit MichiganBusiness.org. For Pure Michigan® tourism information, your trip begins at michigan.org. Join the conversation on: Facebook, Instagram, LinkedIn, and Twitter.

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3/15/2020 Update

Monday, all K-12 schools in the state of Michigan will be closed to help prevent the spread of the Novel Coronavirus. Governor Gretchen Whitmer made the announcement after 10 more cases if coronavirus were confirmed positive in state.

The Michigan Department of Transportation is planning a 15-and-a-half-million-dollar project. MDOT announced crews will begin resurfacing Eight Mile Road between I-75 in Hazel Park and I-94 in Harper Woods starting March 30th.  

The Kalamazoo St. Patrick's Day parade this Saturday is canceled. The Irish American Club of Kalamazoo canceled the parade after Governor Gretchen Whitmer declared a state of emergency due to the COVID-19 outbreak.

Two Blue Cross Blue Shield walk-in centers are closing in Grand Rapids due to the coronavirus. The health insurance company says it will be closing ten total customer walk-in centers across Michigan.

An Oakland County judge may become the first-ever Chaldean American to serve as a federal judge. President Trump has nominated Oakland County Circuit Court Judge Hala Jarbou to fill a vacancy.

Saginaw K-9 Deebo is back on the force. The K-9 Deebo Facebook page says all restrictions have been lifted. Deebo has been cleared for light training after being stabbed a month ago.

Willow Health Center, part of the Ingham Community Health Centers, will relocate, to a more central Lansing location Tuesday. Willow Health Center provides care to people ages 10-21.  

If you are a user of the driver assistance program through the Mackinac Bridge Authority, you may want to find a new way across the bridge. The authority announced on Twitter they will be suspending the program to help slow the spread of the coronavirus.