Wednesday, August 26, 2009
LANSING– Governor Jennifer M. Granholm and Michigan Economic Development Corporation (MEDC) President and CEO Greg Main today announced that the Michigan Supplier Diversification Fund will help three companies —Morley Companies Inc., Motor City Stamping and Mark One Corporation — expand operations and create jobs. The program addresses the current lack of bank financing available to companies that are attempting to diversify. The fund is a multi-faceted initiative designed to help Michigan manufacturers and auto suppliers diversify into new emerging sectors.
“The Michigan Supplier Diversification Fund is an innovative tool designed to help companies in our state diversify and take advantage of new opportunities,” Granholm said. “These three companies showcase our continuing efforts to diversify Michigan’s economy and create new jobs.”
With Michigan Strategic Fund (MSF) approval, the three companies will receive assistance through the Collateral Support Program that was recently launched under the Michigan Supplier Diversification Fund. The program addresses the shortage of bank financing available to companies that are attempting to diversify. Under the program, the MEDC was able to partner with the companies, the U.S. Small Business Administration (SBA), the Michigan Certified Development Corporation (MCDC) and banks to provide the necessary liquidity to ensure the company could purchase fixed assets and expand its working capital.
The projects approved today are:
- Morley Companies Inc.: The marketing organization, which has historically serviced the auto industry, is expanding to capitalize on new opportunities in the IT industry. Citizens Bank plans to fast-track a loan for approximately $5 million for a new facility in Saginaw and new equipment. The MSF approved allocation of $2.3 million to be used as a collateral deposit. Citizens will also work closely with the SBA and the Michigan Certified Development Corporation to provide additional access to capital. The project is expected to create up to 350 new direct jobs.
- Mark One Corporation: The Gaylord-based equipment/machine fabricator is expanding to utilize its newly developed GreenCleen technology which is expected to revolutionize and decontaminate the steel cleaning process. Independent Bank has agreed to fast-track a consideration of the loan request for $3 million to assist in a significant expansion. Independent may additionally work with the SBA to increase access to capital. The MSF approved an allocation of $1.1 million to be used as a collateral deposit. The project is expected to create up to 50 new direct jobs.
- Motor City Stamping Inc.: The Chesterfield Township-based company operating as a stamper, welder, fabricator and in-house tool & die maker is currently diversifying into the military and defense contracting sectors. Huntington Bank plans to provide a loan for up to $5 million for the company’s expansion. The MSF approved allocation of $2.4 million to be used as a collateral deposit. The project is expected to create up to 150 new direct jobs.
To be eligible for the program, a company must fall under the definition of a firm eligible to receive a MEGA tax credit. A business must also be engaged with a private lender for the purpose of acquiring a commercial loan for a diversification project and must exhibit a cash-flow or collateral shortfall according to the lender’s analysis.
“Using these funds to address either a cash-flow or collateral shortfall will stabilize Michigan auto suppliers and allow diversification projects to proceed, bringing new jobs and investment to our state,” MEDC President and CEO Greg Main said. “We are facilitating public-private transactions and leveraging inter-agency cooperation to get this critical capital flowing to Michigan companies.”
The MEDC is now accepting applications for the Michigan Loan Participation Program. Interested borrowers and lenders should contact the MEDC customer service center at (517) 373-9808 for more information about how to apply.
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