Editor’s note: This story was updated to include funding allocations to regional economic development organizations and comments from the Small Business Association of Michigan.
The Michigan Economic Development Corp. plans to launch new grant funds next week totaling $115 million to provide financial assistance to small businesses, farms and agricultural processors recovering from the effects of the COVID-19 pandemic.
The Michigan Strategic Fund board today gave approval to foming the $100 million Michigan Small Business Restart Program that will provide grants of up to $20,000 to small businesses and nonprofit organizations to use for working capital to pay payroll, rent, mortgages, utilities and other expenses related to re-opening.
The Small Business Restart Program and a separate $15 million grant fund for ag processors and farms “represent our steadfast commitment to leveraging all resources at every level of government to ensure that Michigan is in a position to support the small businesses, nonprofits and industries that are so critical to our state’s well-being, while continuing to set a path to long-term economic recovery,” MEDC President and CEO Mark Burton said.
The MEDC begins accepting applications to both grant funds July 15.
Burton expects a high demand across the state for assistance and “we expect a high level of activity right away” when the application process opens.
“We do expect there is considerable need out there,” Burton said. “There is need that we continue to see in all corner of the state largely because we continue to be have capacity limitations, for instance, on restaurants and there are still other closures, and there’s obviously a fear that we’re not going to be reopening as quickly as we thought, given some of the activity that we’re seeing, especially across the country.”
Using federal funding allocated to the state through the CARES Act and appropriated by the state Legislature, the MEDC will work through the same economic development organizations that handled previous $20 million grant and loan funds to review and award grants. Each organization will receive a minimum of $3.5 million to distribute. Any proceeds not used by Sept. 30 would go back to the Michigan Strategic Fund to distribute to other economic development organizations.
Small businesses that received a grant from the prior state grant program are ineligible for the Michigan Small Business Restart Program. That limitation was part of the legislation enacted by lawmakers to allocate funding for the grant fund.
Of the $100 million, The Right Place Inc. in Grand Rapids will receive a little more than $9.5 million to distribute, and Zeeland-based Lakeshore Advantage will get $3.5 million. The MEDC allocated a little more than $7.5 million to Southwest Michigan First, and the Lansing Area Economic Partnership got $5.5 million.
The Michigan Small Business Restart grants “will be an important part of the economic recovery of small business in Michigan,” Brian Calley, president of the Small Business Association of Michigan, said in a statement.
“This program leverages federal dollars to bring relief to entrepreneurs struggling with the effects of this global pandemic in a thoughtful way — including working through local (economic development organizations) to ensure resources are distributed in the most equitable and effective way for each region in the state,” Calley said.
The supplemental spending bill state legislators approved three weeks ago and Gov. Whitmer signed last week also requires at least 30 percent of the $100 million to go to eligible businesses owned by women, minorities and veterans “to ensure economic prosperity for all Michigan businesses,” Burton said.
The pandemic has had a broader effect on women-, minority- and veteran-owned small businesses nationally and the 30-percent requirement is to make sure that grants are distributed “as equitable as possible when it comes to seeing who will benefit,” Burton said.
“From a long-term economic standpoint, it’s critically important that we address some of these inequities we’re seeing from this impact,” he said.
The state modeled the Small Business Restart Program after the earlier $20 million grant and loan relief funds created in March that worked through economic development organizations across the state. More than 2,700 small businesses that employ nearly 12,000 people received grants of up to $10,000 each.
The Michigan Strategic Fund also has awarded $8 million so far in loans to about 130 small businesses; the MEDC continues to review loan applications.
The Michigan Agricultural Safety Grant Program the Strategic Fund approved today also starts July 15 and will allocate $10 million for grants to agricultural processors and $5 million for farms. The funds would provide $1,000 per employee to cover the costs from June 1 to Sept. 15 to mitigate the effects of COVID-19 such as testing, personal protection equipment, facility needs, higher sanitation costs, employee training, and upgraded safety procedures for farm-provided housing.
Ag processing grants will range from $10,000 to $200,000, and safety grants will go from $10,000 to $50,000.
The state has about 50,000 farms and 2,100 agricultural processors, according to a memo from MEDC staff to the Michigan Strategic Fund Board. East Lansing-based ag lender GreenStone Farm Credit Services will administer the program for the MEDC.
News coverage in the small business section of MiBiz is made possible by advertising support from the Small Business Association of Michigan. SBAM is the statewide and state-based association that focuses solely on serving the needs of Michigan’s small business community. This advertisement has no effect on editorial consideration in MiBiz.