State deploys $72 million in first round of federally funded small business loans and investments

The state has begun the process of allocating approximately $237 million in federal funds to help small businesses.

Up to $72 million in funds received by Michigan from the Federal Small Business Credit Initiative 2.0 will be used to lend to small businesses through a series of Michigan Economic Development Corporation capital and loan programs, state officials announced Thursday. Did.

MEDC also directs up to $75 million in equity investments in early-stage technology-based businesses in Michigan through its Small Business Venture Capital Program, which invests in venture capital firms operating in Michigan as a limited partner. increase. Venture funds use their funds to invest in eligible businesses.

“Michigan’s venture capital ecosystem has seen tremendous growth in recent years, including being nationally recognized as the fastest growing state for VC investment last year,” said Entrepreneurship and Innovation at MEDC. Fred Molnar, vice president of operations, said in a statement. “We remain committed to working with partners across the state to deploy all available federal and state resources to stimulate further innovation and economic opportunity here in Michigan. is.”

As my biz Venture capital investment in Michigan, reported in July, increased in value as the industry gained further momentum, continuing a multi-year growth trend and as the state attracted more outside investors to join the deal. It will reach an all-time high in 2021.

The Michigan-based venture capital firm invested $1.38 billion in 155 companies through 161 deals last year, according to the company. Michigan Venture Capital AssociationThe 2022 Impact Report was released last month. This compares to $949 million in venture capital investment in 2020 in 162 deals involving 147 firms.

MEDC will accept applications from venture capital firms for the Small Business Venture Capital Program for three years until funding is exhausted. The Michigan Strategic Fund Board makes the final decisions regarding investments in venture companies.

Michigan’s $236.9 million share of the State Small Business Credit Initiative (SSBCI) awarded by the U.S. Treasury Department in May will be allocated to states under the U.S. Rescue Plans Act signed into law by President Biden in March 2021 out of $10 billion invested.

Funding from the Michigan Business Growth Fund 2.0, which deploys SSBCI funding, includes manufacturing, professional and corporate services, engineering, design and development, financial services, mobility, medical device technology, high-tech agriculture, tourism, and logistics.

Under the SSBCI’s federal guidelines, Michigan must direct $39.8 million in federal funds to small businesses owned by socially and economically disadvantaged individuals. An additional $12.9 million will be needed for small businesses with 10 or fewer employees, especially those with a greater need for increased access to capital.

In 60 days, MEDC will announce an application process for loans up to $250,000 from select small business lenders.

Amy Rencher, Senior Vice President of Small Business Services at MEDC, said in a statement: