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Circuit Court
40 N Main, Mount Clemens, MI 48043
(586) 469-5208

FINANCING

Growing your business takes resources. Our department can help connect you with the tools you need to take that next step. Reach out to us to see how we can help you. Learn more about some of the programs we have available by reading the information below. You can learn more about resources provided by the state at the MEDCs website.

Capital Access Program

Administered by the Michigan Strategic Fund (MSF), the Capital Access Program is an innovative program that connects businesses to the capital they need. The Capital Access Program (CAP) uses a small amount of public resources to generate loans given through bank institutions to companies in need. Participating Michigan banks have offered CAP loans directly to companies that need credit enhancement. The bank, the company and the MSF pay a small premium into a reserve that makes it possible for the company to receive fixed asset and working capital financing.

The program can be used to finance most types of businesses and must be for a new extension of credit.  The maximum loan amount is $5 million and can be long or short term financing, term loans or lines of credit.  Eligible borrowers include most businesses located and legally authorized to do business in Michigan, have no more than 500 employees and be for profit institutions.

Michigan Business Growth Fund Collateral Support Program

The Collateral Support Program is designed to assist lenders and borrowers in financing expansion or diversification projects.  Specifically, the program seeks to enable suppliers to acquire the necessary financing that might otherwise be unavailable due to a collateral shortfall according to the lender's analysis.   These accounts cover all or a portion of a calculated collateral shortfall as described by the lender.

To qualify, a business must be engaged with a private lender for the purpose of acquiring an extension of commercial credit and must exhibit a collateral shortfall. The borrower must have no more than 750 employees and participate in one of the qualified industries identified for the program.  The proceeds must be used for projects within the state of Michigan and the maximum amount available is capped at $5 million. Borrowers can apply through the Michigan Economic Development Corporation (MEDC) which administers the program for the Michigan Strategic Fund.

Loan Participation Program

The Michigan Business Growth Fund - Loan Participation Program (MBGF-LLP) assists companies in financing new expansion and diversification projects when there is a shortage of capital or their cash flow is considered speculative. In short, the MBGF-LPP can purchase a portion of the loan, up to 49.9%, that a company takes out through a private lender. This is advantageous to a lender, because it limits their exposure, while offering free cash flow to the company during the grace period. Another benefit of this program is that repayment can be deferred for up to 36 months. This program enables suppliers to acquire the needed financing to expand and diversify into new growth industries.
 
In order to qualify, the borrower must be engaged in a qualified industry, such as manufacturing, research and development, wholesale and trade, film and digital media, office operations, or a high-tech business. The maximum participation is capped at $5 million and it cannot extend a company’s total line of credit past $20 million. Eligible companies must have no greater than 750 employees. A company looking to participate can fill out the Michigan Loan Enhancement Program intake form at www.michiganbusiness.org.

Private Activity Bond Program

Another attractive source of financial assistance for companies looking to grow is private activity bonds issued through the Michigan Strategic Fund (MSF). These bonds are tax exempt revenue bonds that can be issued for the public purpose of economic development. An eligible company applies for this financing through the MSF board, and if approved, the MEDC borrows money from the private capital lender and bestows it on the approved company. There are fees associated with applying for the bonds. The primary advantage of this program, is that due to the tax exemption, typical borrowing rates are lower than interest rates on conventional borrowings. The bonds are repaid by the user’s credit and/or, if applicable, credit enhancements, or any assets the user may pledge to the bonds.
 
There are three different types of projects that are eligible for this program and they include manufacturing projects, not-for-profit corporation projects and solid or hazardous waste facility projects. For manufacturing projects, 95% of the proceeds must be used to acquire land, and/or building and equipment related to the manufacturing process. The maximum size of the bond is limited to $1 million free of any restrictions on capital expenditures, or $10 million based on the condition that the companies expenditures in the locality over three years does not exceed $20 million. There are no limitations on not-for-profit and solid or hazardous waste facility projects, including the size of the bonds. Visit www.michiganbusiness.org for more details.

Taxable Bond Financing

The MEDC’s Taxable Bond Financing program is in place to provide small and medium-sized companies access to public capital markets normally available to larger companies. The principle advantage of utilizing a taxable bond to a company is that they provide long-term (10-20 years), fixed or variable rate financing. Another attractive advantage of taxable bonds is that there are no restrictions on the uses of the proceeds by the Internal Revenue Service. Eligible companies must have projects compatible with the Michigan Strategic Fund’s economic development mission.
 
The taxable bond program can provide financing for up to 100% of the cost of a project, including fixed assets, cost of issuance and working capital. Eligible projects include commercial air pollution control and water pollution control facilities, as well as previously excluded businesses such as industrial facilities exceeding $10 million, nursing homes operated by for-profit corporations, recreational facilities, automobile sales and service facilities and restaurants. Applications are approved by the Michigan Strategic Fund board, and there are fees associated with the application.

 

 

 
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