Fifteen Michigan organizations are receiving $34.3 million in federal funding to support lending in low- and moderate-income markets that are still recovering from the pandemic.
OMNI Credit Union and BlueOx Credit Union, both based in Battle Creek, and Dowagiac-based Chi Ishobak Inc. are among the federally designated community development financial institutions (CDFIs) that received new funding awards from the CDFI Fund within the U.S. Department of the Treasury.
The federal funding through the CDFI Equitable Recovery Program went to statewide organizations that include Marquette-based Northern Initiatives, the Michigan Women’s Foundation that has offices in Detroit and Grand Rapids, and the Lansing-based Opportunity Resource Fund.
CDFIs can use the federal money to expand lending, grants and investments in underserved low- and moderate-income communities, and for borrowers who have “significant unmet capital and financial services needs that have experienced disproportionate economic impacts from the COVID-19 pandemic,” according to an announcement from the Treasury Department. The federal grants also can go to support the CDFIs’ growth in serving underserved markets.
The nearly $2.5 million that Northern Initiatives received will go to support small businesses and entrepreneurs hit the hardest by the pandemic, President Elissa Sangalli told MiBiz.
Northern Initiatives will focus on lending to entrepreneurs of color “because we know those populations were the most hurt during COVID in terms of both the health crisis, but also the lack of access to capital,” Sangalli said.
The goal is to “help small businesses start and grow,” Sangalli said.
“We know that small businesses are the greatest job creators in their communities and across the state, and so we really want to help them launch and grow,” she said.
Northern Initiatives also will use the new federal funding to support small businesses that shifted their business models during the pandemic, Sangalli said. As an example, she cites restaurants that added takeout or transitioned to a to-go model in response to pandemic-related safety measures.
“We know that there are a lot of businesses that have really rethought their model, whether that’s shifting their hours, or whether that’s … a sit-down enterprise that has switched to more of a to-go model, or maybe they opened back up and they’re hosting inside dining and they discovered they can add a to-go line to their business,” Sangalli said. “We want to help entrepreneurs make those changes and provide them with the working capital they need to do that, or to help them purchase the equipment and technologies that would make those kinds of business models easier.”
Battle Creek-based OMNI Credit Union intends to use the $2.4 million CDFI funding for auto, home and personal consumer loans. The credit union has 13 offices across Southwest Michigan, including small rural communities like Bangor and Colon, with $598.2 million in total assets.
“We serve a lot of low-income communities,” OMNI CEO Ted Parsons told MiBiz. “We’ll just continue to increase our member access to consumer financial products like affordable mortgages, auto loans, personal unsecured loans — things that help people that are in need and where they can’t get a loan somewhere else. It’s a good opportunity for us to expand. It helps us be able to help more people.”
Nationwide, the Treasury Department this week awarded $1.73 billion in grants to 603 CDFIs in 44 states, the District of Columbia, Puerto Rico and Guam. Among the grant recipients were 264 loans funds, 203 credit unions, 129 banking organizations, and seven venture capital funds.
“These grant funds will be transformative for grantees that are building a more equitable, resilient economy, along with helping sustain our strong economic recovery,” Treasury Secretary Janet Yellen said in a statement. “These critical resources will allow mission-driven lenders to expand access to capital in financially underserved communities, which will help increase contributions to long-term economic growth.”
The CDFIs in Michigan receiving funding were:
- BlueOx Credit Union, Battle Creek — $3.5 million
- Chi Ishobak Inc., Dowagiac — $2.1 million
- CORE Community Partners, Bingham Farms — $500,000
- Detroit Development Fund — $1.5 million
- ELGA Credit Union, Grand Blanc — $2.5 million
- Invest Detroit Foundation — $2.4 million
- Lake Superior Community Development Corp., L’Anse — $505,683
- Michigan First Credit Union, Lathrup Village — $3.7 million
- Michigan Women's Foundation, Detroit — $500,000
- Northern Initiatives, Marquette — $2.5 million
- OMNI Community Credit Union, Battle Creek — $2.5 million
- One Detroit Credit Union — $4.3 million
- Opportunity Resource Fund, Lansing — $2.5 million
- Prosperus Detroit Micro Lending — $500,000
- Public Service Credit Union, Romulus — $5.0 million