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  1. Services
  2. Access Capital
  3. Lenders

Capital Access Program Information for Lenders

By providing loan enhancement up-front, the MEDC Capital Access Program reduces the risks lenders face when lending to small businesses.

What is Capital Access?

MEDC partners with lenders of all sizes to provide financing support so they can provide loans to small businesses in their communities and across the state. Capital Access programs reduce the risks lenders face when lending to small businesses by providing loan enhancement up-front. The lender can then in turn provide access to capital that wouldn’t traditionally be available.

What are the benefits of working with MEDC’s Capital Access team?

Capital Access provides loan enhancement to lenders to be more comfortable lending to small businesses and allows them to be more active with small business in their community. By working with MEDC, lenders can provide traditional loans to small businesses that they otherwise would not be able to provide.

Capital Access Programs

Collateral Support Program

The intent of the Collateral Support Program is to supply cash collateral support to lending institutions to enhance the collateral coverage of borrowers. This support, maintained in an account at the lending institution may cover all or a portion of a calculated collateral shortfall as described by the lending institution, up to 49.9% of the total loan amount. Lenders that have a borrower with a collateral shortfall will apply for coverage through the MEDC, which provides the administrative services for the program for the Michigan Strategic Fund (MSF). If approved, the MSF will deposit the cash into an interest-bearing account with that lender, which will then be pledged as collateral on behalf of the borrower.

For more information, please review the documents below:

  • Collateral Support Program Factsheet
  • Download the SSBCI Deposit Agreement
  • Download the MSDF Deposit Agreement

Loan Participation Program

The intent of the Loan Participation program is for MEDC to partner with lenders to finance projects when faced with borrowers whose projected cash flows are considered speculative by the lender. The program will purchase a portion of a loan from the lender, thus decreasing the exposure that the lender has to that borrower. The program has the option, based on a review of the borrowers historical and proforma financial statements, to offer a deferment on repayment of the program’s portion of the loan for up to 36 months. Participation is advantageous to lenders as it limits the project exposure of lenders, and it offers borrowers “free cash flow” during the grace period allowing full coverage on the lender’s portion of the loan.

For more information, please review the documents below:

  • Loan Participation Program Factsheet
  • Download the SSBCI Deposit Agreement
  • Download the MSDF Deposit Agreement

Capital Access Program

The Capital Access Program (CAP) is an innovative program available to assist businesses with capital needs. The CAP uses small amounts of public resources to generate private bank financing, providing small Michigan businesses access to capital that might not otherwise be available.

Participating banks throughout Michigan have offered CAP loans directly to companies that need credit enhancement. Similar to a loan loss reserve fund, 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.

CAP loans can be long- or short-term, term loans or lines of credit as determined by the lender. The bank has the flexibility to recast, extend or refinance the loan to address the needs of the business owner.

For currently participating lenders, you can access the loan filing form, claim form, borrower assurances, lender assurances and operating company assurances forms below:

  • Download Capital Access Program Loan Filing form
  • Download Capital Access Program Claim form
  • Download SSBCI - CAP Amendment - Borrower Assurances
  • Download Capital Access Program Lender Assurances form
  • Download Capital Access Program Operating Company Assurances form

For lenders interested in participating in the Capital Access Program, access the factsheet and agreement document below:

  • Capital Access Factsheet
  • Download SSBCI - CAP Agreement

Grow Michigan II, LLC

Grow Michigan II, LLC, is capitalized by members of Michigan’s banking community and the Michigan Strategic Fund. It provides attractively priced growth capital in the form of subordinated/mezzanine debt to the Michigan small business community.

Grow Michigan’s target loans are to profitable small businesses with strong management teams committed to excellence.

  • For more information, visit: https://www.growmichiganfund.com/ 
  • Download the Grow Michigan II brochure

Contacts at MEDC

For more information on these programs and to learn how your lending institution can get involved, please find program contact information below:

  • Chris Cook, Program Director
  • Amber Westendorp, Debt Programs Specialist
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