Michigan to receive $237 million in federal small-business support
Washington — Michigan will receive up to $237 million in new federal support for small businesses and entrepreneurs, the U.S. Treasury Department announced Thursday.
The state is one of the first five to receive funding under the $10 billion State Small Business Credit Initiative, which is aimed at increasing access to capital for underserved and very small businesses. The program was first started in 2010 and was expanded under COVID relief package passed last year.
The Treasury Department estimates the funding will leverage up to 10 times the amount of private investment.
Michigan has been "an innovator" in developing credit support programs especially in the manufacturing sector, according to a Treasury press release announcing the grant funding. In the past, manufacturing has been the top industry supported with lending and venture capital through the program.
Michigan will use a third of its allocation to fund the state Business Growth Fund Collateral Support Program, a pre-existing program that offers collateral through lending institutions to eligible borrowers who don't have enough collateral on their own to secure a business loan.
In the past, the program has been used to support industries with high wages and high job growth potential such as manufacturing, engineering and agribusiness. The new funding will expand the program to include smaller service and retail businesses hurt by the pandemic.
Michigan Senators Gary Peters, D-Bloomfield Township, and Debbie Stabenow, D-Lansing, praised the funding allocation Thursday and said it will create jobs and help offset the economic effects of the pandemic.
"As we work to bolster our economic recovery, we must ensure that Michigan small businesses have the resources they need to stay afloat," Peters said in a statement. "This funding will directly help our small business community create jobs, adapt operations and support local economies across our state."
West Virginia, Maryland, Kansas and Hawaii are the other four states to receive funding in the first round of appropriations.