©2016 Michigan Economic Development Corporation
Michigan Economic Development Corporation (MEDC) works to increase the availability of capital for companies in Michigan at every stage of company development. MEDC can help connect your business with capital providers – federal grants, venture capitalists, banks, and others – as well as offer programs that can expand the reach of those capital providers.
Funding options include:
Use the MEDC capital locator tool to find and connect with capital providers that are active in Michigan and have interest in your company’s stage and sector.
MEDC offers programs to assist companies with debt capital needs. Please visit the links below to find more information on these programs. Current Debt Programs:
The Michigan Pre-Seed Capital Fund supports high-tech start-up companies as they near commercial viability by providing access to early-stage capital, accelerating company development. As a central fund to the Michigan SmartZone Network, these funds are designed to support this critical stage in the development lifecycle to prepare companies for follow-on private investment. Companies developing technologies in advanced automotive, manufacturing and materials, alternative energy, homeland security and defense and life sciences, statewide are eligible for these funds through the Michigan SmartZone Network.
Contact your local SmartZone for more information.
The Collateral Support Program is funded by federal dollars provided under the State Small Business Credit Initiative (SSBCI) Act of 2010, and is designed to assist lenders and borrowers in financing expansion or diversification projects. The Collateral Support 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. The program will supply pledged cash collateral accounts to lenders to achieve this goal for approved projects. MEDC is now accepting applications for the Collateral Support Program.
The Loan Participation Program is funded by federal dollars provided under the State Small Business Credit Initiative (SSBCI) Act of 2010, and is designed to assist lenders and borrowers in financing expansion or diversification projects. The Loan Participation Program seeks to enable companies to acquire the necessary financing that might otherwise be unavailable due to a cash flow shortage according to the lender’s analysis. The program will participate on loans with lenders to pursue this goal for approved projects. MEDC is now accepting applications for the Loan Participation Program.
The Capital Conduit Program is a vehicle used to support both small business and real estate capital market partners. Developed as a loan enhancement program, it provides low cost capital to a lender or fund manager in exchange for strong private investment participation, a commitment to 100% Michigan transactions, and other asset class specific policy goals. The MEDC is accepting applications for the Capital Conduit Program. Please contact Capital Access Unit for details.
The Capital Access Program uses small amounts of public resources to generate private lender financing, providing small businesses in Michigan access to capital that might not otherwise be available. Similar to a loan loss reserve fund, the bank, the borrower, and the MEDC pay a small premium into a reserve that makes it possible for the borrower to receive financing.
View the Capital Access Program (CAP) Fact Sheet for more information.
For currently participating lenders, you can access the loan filing form, claim form, borrower assurances, lender assurances and operating company assurances forms below:
For lenders interested in participating in the Capital Access Program, you can access the necessary agreements below:
The Community Development Block Grant (CDBG) Revolving Loan Fund Program (RLF) was established in the early 1980s to distribute CDBG funds to eligible Units of General Local Government (UGLG) to carry out state approved business loans that met CDBG job creation objectives, primarily benefitting low and moderate income individuals. The program provides loans, loan guarantees, collateral enhancements, and provides capital in other allowable mechanisms through either existing Revolving Loan Funds based within a specific UGLG or through newly established Regional Revolving Loan Funds.
View the Community Development Block Grant Revolving Loan Fund Program Fact Sheet for more information.
The Michigan Department of Agriculture & Rural Development (MDARD), in partnership with the Michigan Economic Development Corporation (MEDC), offers multiple programs to help support the financing and growth of agricultural businesses in the State of Michigan. Michigan is an international leader in the agriculture industry, and MDARD and MEDC are committed to supporting the continued growth of the industry within the state. A critical component for success is ensuring that businesses can access the capital they need to grow. On-farm operations and retail projects are not eligible for these programs. The following programs are available to support the capital needs of the agriculture industry.
View the Agribusiness Financing Programs Fact Sheet for more information.
Small businesses looking for support for building energy retrofits, process improvements, retooling, and renewable energy projects may qualify for an Energy Efficiency and Renewable Energy (EERE) loan offered through the Michigan Energy Office. Businesses must have projects that:
For more information on these programs, please call the MEDC Customer Contact Center and they will direct you to the appropriate Michigan Energy Office staff.
Private activity bonds are an attractive source of financial assistance to economic development projects in Michigan. They provide profitable firms with capital cost savings stemming from the difference between taxable and tax-exempt interest rates. Public facilities, which generate a revenue stream, (parking structures for instance) have traditionally been financed by municipalities through tax-exempt “revenue bonds.” Private activity bonds apply this same tax-exempt finance mechanism to the “public purpose” of economic development. The governmental unit borrows money from private capital markets, secured only by the project’s revenues rather than the government’s full faith and credit. Interest income earned on bonds issued by a governmental entity to finance a project for a private company which has demonstrated a good public purpose is exempt from federal, state, and local income taxes, thereby reducing the cost of capital (including the cost of letters of credit, remarketing fees, etc.). For more information, download the Private Activity Bond fact sheet.
Project developers can benefit from the low cost capital provided by EB-5 investors. The State of Michigan EB-5 Regional Center pools funds from qualified investors to support the financing of major projects. The program requires the development of complex investment and marketing documents and a lengthy timeframe for federal approval. Projects must be of sufficient scale to support the cost of legal, financial and other experts, typically at least $20 million. Projects on a short timeline, or that have near term prospects for securing more traditional financing are not good candidates for EB-5 financing.The State of Michigan EB-5 Regional Center serves as an intermediary between EB-5 projects and international investors. The regional center is administered by the MEDC, the State of Michigan’s economic and community development authority. The center is one of two state-owned centers in the U.S., providing an established EB-5 resource and a centrally organized process for investors and project developers. The State of Michigan EB-5 Regional Center markets projects to global investors with a focus on those projects that are closely aligned with state and regional economic development priorities and that are most likely to be attractive to investors or project developers. The EB-5 program can also provide financing for small businesses. The requirements for EB-5 individual investor projects differ from the projects financed through an EB-5 Regional Center. This activity would be managed by an individual and their immigration attorney. The primary advantage of investing through a regional center versus as an individual investor is in how jobs are counted to meet requirements. Individual investor projects can only consider direct (W-2) jobs created by the project, while regional center projects can also count indirect and induced jobs generated by project expenditures.
MEDC is committed to supporting the growth of venture capital and private equity in the state. Please see the list below which shows current and programs.
The Accelerator Fund program seeded two new early stage venture capital funds. The Michigan Strategic Fund has committed a total of $12 million to the program.
Michigan Accelerator Fund I is an investment partnership headquartered in Grand Rapids, Michigan. The purpose of this venture capital fund is to achieve significant, long-term capital appreciation for its investors. The Fund invests in early stage companies that fall into one of six target sectors: life sciences technology; advanced manufacturing; homeland security; alternative energy technology; information technology; and agriculture. Companies must be based in Michigan. The Fund focuses primarily on seed and early stage venture capital investments in life science technology companies. Visit the Michigan Accelerator Fund I website for more information.
Huron River Ventures (HRV) is an investment partnership headquartered in Ann Arbor, Michigan. The firm invests in seed-stage, energy technology, Cleanweb, and smart transportation enterprises. HRV is ideally positioned to take advantage of the convergence of two significant trends: Global Energy Technology Growth and Michigan’s Economic Transition. As these trends converge, entrepreneurs and technologists are increasingly seeking early-stage capital and support to commercialize breakthrough technologies. HRV was established to meet this need. Visit the Huron River Ventures website for more information.
The 21st Century Investment Fund is a fund of funds created in 2006, managed by Credit Suisse. It has committed $109 million from the 21st Century Jobs Fund as a limited partner in 12 venture capital, mezzanine, and private equity funds. These funds must invest in Michigan companies, at minimum, an amount equal to the MSF investment in each fund. The Fund seeks to strengthen and diversify Michigan's economy by fostering the creation and growth of new jobs, businesses, and industries within the state. This initiative is focused on four main sectors of the economy, including life sciences, alternative energy, homeland security and defense, and advanced manufacturing. Visit the 21st Century Investment Fund website for more information.
The Venture Michigan Fund (VMF) is a $95 million venture capital investment program designed to help Michigan create jobs and bring new industries to the state through the creation of a fund-of-funds that invests in private equity managers that invest primarily in Michigan-based early stage companies. A unique component of VMF is that the capital for the fund is strictly raised by outside investors, with the Michigan Department of Treasury offering to provide investors with up to $200 million of tax voucher certificates to offset any shortfall. VMF seeks to invest in mainly Michigan based companies as well and Michigan focused private equity funds. Credit Suisse Bank manages the fund, and strives to highlight the strong opportunity for private equity investment in Michigan given the state's strong capital and resource base, a vibrant infrastructure of government, industry and academics, and the increasing number of start-up companies that require financing for growth. Visit the Venture Michigan website for more information.
InvestMichigan! represents a groundbreaking partnership of public and private interests in the deployment of private equity capital. InvestMichigan! is a $300 million fund focused on generating strong returns for investors and growing the next generation of Michigan companies. InvestMichigan! has two main components in order to support companies in both early and later stages of development. Under the Growth Capital Program, InvestMichigan! targets lead and co-investment opportunities in venture capital and small buyout stage companies. The Michigan Opportunities Program targets lead investment opportunities in buyouts and growth equity investments in well established companies. InvestMichigan! strives to fundamentally change the way that government and private business work together, and has several goals: to retain and attract businesses to Michigan, nurture portfolio companies at each phase of development, enhance the reputation and further develop Michigan’s entrepreneurial ecosystem, and attract leading regional and national private equity and venture capital investment funds to Michigan. Visit the InvestMichigan! website for more information.
This 18-24 month program will allow up to 10 fellows in a three year period to be hired at the venture capital firms in Michigan to create opportunities for emerging leaders who want to stay or move back to Michigan to seek careers in venture capital.
Visit the Michigan Venture Fellows Program website for more information.
MEDC is committed to supporting the growth of mezzanine capital in the state. Please see the list below which shows current and past programs.
Designed to address growth and transition capital for small businesses, Grow Michigan, LLC is a public private partnership between the MEDC, the Michigan Strategic Fund, Crescent Capital LLC, and more than 10 large and small banks in Michigan. The fund is designed to operate below the traditional mezzanine markets offering loans from $500,000 to approximately $3.0M in a subordinated (or secondary) collateral position at attractive rates. This capital, delivered in conjunction with a senior bank lender, can help a business grow into new contracts or finance succession/acquisition events. The fund’s projects must meet public policy goals including supporting jobs and investment in Michigan.
Visit the Grow Michigan, LLC website for more information.
To contact a business development specialist,
click here or call
300 N. Washington Sq., Lansing, MI 48913