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What is Capital Access and how can it help my business?
Capital Access is made up of several programs that can help small business throughout Michigan receive loans from banks and lending institutions to help their businesses grow and succeed. MEDC works directly with lenders who in turn can provide traditional financing to small businesses.
Small business owners in need of financing or loan support, are encouraged to find a participating lending institution based on the program of interest. Small business owners should feel empowered to talk with their local branch or lending institution and have them contact MEDC if they are not already part of Capital Access.
Over the past 10 years MEDC has deployed more than $180 million dollars to lending institutions across the state, who have in turn been able assist more than 250 small businesses. This has leveraged nearly $100 million in private investment in Michigan.
Collateral Support Program
The Collateral Support Program is funded by federal dollars provided under the State Small Business Credit Initiative (SSBCI) Act of 2010, and 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.
To qualify, a business must be engaged with a private lender for the purpose of acquiring a commercial extension of commercial credit (see list of currently participating banks in the document linked below) and must exhibit a collateral shortfall according to the lender’s analysis. The Borrower must have no more than 750 employees, and must participate in a qualified industry.
For program guidelines, more information and to see a list of all currently participating lending institutions, please review the following document:
Loan Participation Program
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 by purchasing a portion of the loan from the lender for approved projects.
To qualify, a business must be engaged with a private lender (see list of currently participating banks in the document linked below) for the purpose of acquiring a commercial extension of commercial credit for a diversification or expansion project. Borrowers must have no more than 750 employees, and otherwise comply with all state and federal requirements for the program. The borrow must also participate in a qualified industry.
For program guidelines, more information and to see a list of all currently participating lending institutions, please review the following document:
Capital Access Program
The Capital Access Program is an innovative program available to assist businesses with less than 500 employees 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.
The program can be used to finance most types of business (with the exceptions of the construction or purchase of residential housing; development of a casino, stadium or arena; or passive real estate). To date, 15 financial institutions in Michigan participate in CAP with more being added.
For program guidelines, more information and to see a list of all currently participating lending institutions, please review the following document:
Private Activity Bonds
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.).
The Michigan Strategic Fund (MSF) issues private activity bonds on behalf of the borrower and lends the bond proceeds to the borrower. These loans can be made for manufacturing projects, not-for-profit corporation projects and solid or hazardous waste disposal facilities.
For more information, please review the information below:
To utilize MEDC’s Capital Access programs, please review the listing of banks and lending institutions that already participate with MEDC and reach out to one in your area.
If you do not see one in your area or would like to get your bank or lending institution involved, please have your bank’s representative contact MEDC’s capital access team:
