MEDC Announces $4.35 Million in Low-Interest Loans

Birgit Klohs knows the COVID-19 pandemic has done a number on businesses around the state, including those in her neck of the woods.

Klohs, the president and CEO of The Right Place in Grand Rapids, which helps establish and grow businesses the Grand Rapids area, said the pandemic “has brought significant challenges to our region’s businesses.”

That’s why she was glad to see the first round of low-interest loans awarded through the Michigan Economic Development Corporation’s Michigan Small Business Relief Program.

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The MEDC announced Thursday it has awarded $4.35 million to 74 small businesses in 40 counties across Michigan in the program’s first round. That announcement builds on $10 million in grants awarded to more than 2,700 businesses through the program last month.

“These loans will assist in easing the dramatic financial hardship felt by local businesses,” Klohs said. “We are grateful to the Michigan Economic Development Corporation and the Michigan Strategic Fund for making these funds available.”

For its part, The Right Place helped 14 businesses get $1 million in loans (both high-water marks in the state) and retaining 118 jobs.

Michigan Gov. Gretchen Whitmer called the loans “good news for small business owners everywhere.”

“The COVID-19 pandemic hit our small business owners hard, and we’re working around the clock to ensure they have the support they need moving forward,” Whitmer said. “That means ensuring they can pay their employees and provide them with the PPE they need to keep themselves, their families, and the heroes on the front lines safe.”

The Michigan Small Business Relief program was authorized by the Michigan Strategic Fund to provide relief for small businesses negatively impacted by the COVID-19 crisis.

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Loans through the program are intended to support small businesses facing drastic reductions in cash flow and the continued support of their workforce and 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.

The full list of businesses receiving loans so far through the Michigan Small Business Relief Program is available at michiganbusiness.org/msbrp.

Travis White, co-founder and CEO of ProNay Marine in Hancock, said he and his partners had spent more than six years investing “significant time and capital” in starting and growing the business in the rural Upper Peninsula, where “resources are always limited.”

“As a young and rapidly growing company, cash flow is always difficult, especially during times such as these,” White said. “The economic slowdown in our industry due to COVID-19 had a major impact on our sales during our peak sales season. The Michigan Small Business Relief Program provided a lifeline at a time of great need. Without this assistance, we were facing imminent workforce reductions and potentially even the possibility of closing our business.”

Local EDO partners have referred eligible loan applicants to MEDC, where they are reviewed by a loan review committee including the Chief Business Development Officer, Senior Vice President of Growth and Development, and Senior Vice President of Business Development Projects.

All loans made through the Michigan Small Business Relief Program are also approved through Michigan Strategic Fund delegated authority. Additional loans covering remaining regions in the state are expected to be announced in the coming weeks.

“Without these lifelines, there is no question this business would have failed,” said Danny and Kim Brown, owners of Skatemore, Inc. (dba) Rollhaven Skating Centers in Flint. “We have been serving the Flint, Grand Blanc and Burton community for over 65 years. Now we can serve it for many years to come.”

MEDC CEO Mark Burton said the loans are intended to provide critical capital to support the health and sustainability of the state’s small businesses.

“By collaborating with our local economic development partners, we are able to deliver vital financial resources to small businesses all across Michigan as they work to recover from the loss of revenue as a result of the COVID-19 virus.”

Lansing Economic Area Partnership president/CEO Bob Trezise said LEAP has “been working tirelessly” to located and distribute “desperately needed relief” to local small-business owners.

“The MSBRP loan program has brought good news to many,” Trezise said. “These loan funds will help small-business owners continue to operate during and rise back up after this crisis diminishes.”

In addition to the $10 million in loan funds, the Michigan Strategic Fund also approved $10 million in Michigan Small Business Relief Program grants which were administered by 15 local and nonprofit economic development organizations (EDOs) around Michigan.

The EDOs were selected through a competitive process based on capacity to administer the program and ensure coverage to small businesses in all 83 counties in Michigan.

To see the full list of businesses that received MSBRP grants, visit https://www.michiganbusiness.org/msbrp/.