It is impossible to capture every source of financing that may be available or to address each entrepreneur's unique situation; therefore, use this section on financing as one tool in your search for financing, but do not consider it as all-inclusive. The section is divided into two parts:
The Organizations & Programs portion addresses different lending programs and who is lending money under each program.
- Community Development Financial Institutions
- Small Business Administration
- Intermediary Relending Programs
- Certified Development Corporations, 504 Loan Program
A bank loan is one of the more common forms of small business financing. While a business is not limited to any particular location there are several banks that have a presence in Osceola County. These include tcf Bank, Huntington Bank, Lake-Osceola State Bank, Members First Credit Union, and the West Michigan Credit Union.
Community Development Financial Institutions
A CDFI is a financial institution with a community development driven mission. Its this mission that separates it from other types of financial institutions. Its focus is primarily underserved markets and populations. In addition to serving as a financing entity a CDFI also provides development services.
Northern Initiatives has a specific program called the Michigan Good Food Fund. The purpose of the fund is to increase access to healthy food for Michigan children & families in underserved communities. It is a $30 million public-private loan and grant fund to finance healthy food production, distribution, processing, and retail projects. Businesses can apply for up to $250,000. The approach is mission driven. Investments may be made when traditional sources are not an option.
Small Business Administration
The Small Business Administration (SBA) is the largest source of long-term small business financing in the nation; however, the SBA does not lend directly to borrowers. Instead it guarantees a portion of the loan made by the lending institution who must follow SBA guidelines. Ultimately, both the lender and SBA are sharing the risk that a borrower will not be able to repay the loan in full. As a result, lenders are open to making loans that they might not otherwise be willing to do without the guarantee.
During fiscal year 2018 Michigan lenders backed 2,550 loans totaling $500.9 million through SBA programs. From 2010-2018 SBA funds impacted approximately 10% of the small business jobs that were created in Michigan. The SBA 7(a) is the most common loan program there are other SBA loan programs.
For more information on SBA loans visit the SBA website or a financial institution that partners with the SBA.
Intermediary Relending Programs (IRPs) assist in the development of new small businesses and the expansion of existing businesses by providing financing to individuals and businesses that are unable to obtain conventional financing. Typically a larger organization will loan money to another party (the intermediary) that makes loans to businesses. The Small Business Administration and the United States Department of Agriculture, Rural Development have funded two intermediary relending programs in which Osceola County businesses may borrow from.
Great Lakes Energy serves as the "intermediary" for both programs. Both loans can finance up to 30% of a project with the borrower contributing a minimum 20% equity. The loan term matches the financial institution financing the project up to 10 years.
GLE Revolving Loan Fund loans up to a maximum of $250,000. There is no minimum. The interest rate, at the discretion of the board of directors, varies from one-half of the prime rate at the time of the loan approval up to 2%.
- The Zero Interest Loan Program loans up to a maximum of $2,000,000. There is a $100,000 minimum loan. As its name implies this is a 0% interest loan.
The Small Business Administration (SBA) Certified Development Corporation (CDC)/504 Loan Program provides small and medium-sized businesses with long-term fixed rate financing for major fixed assets such as equipment or real estate. Businesses must have a tangible net worth of less than $15 million and an average net profit of less than $5 million for the past two years. Projects are financed through a unique public/private partnership involving private lenders typically financing 50% of the project costs, a Certified Development Company (CDC) as an agent of the SBA providing up to 40%, and the small business investing at least 10%.
The Michigan Economic Development Corporation's capital locator tool can be used to find and connect with capital providers that are active in Michigan and have an interest in your company’s stage and sector.
Whether you’re considering starting a business or already in business you will find the Michigan Small Business Development Center (SBDC) is a helpful resource for understanding the range of financing options available to you. Their programs and specialists can also help you prepare loan packages, analyze financials, and prepare annual budgets.
Funding Sources For Food Related Businesses is a directory of various sources of financing available to food hubs and local food-related businesses. The directory is published by the Michigan State University Center for Regional Food Systems.
NextEnergy is a convener, collaborator, and service provider accelerating advanced energy technologies through industry and venture development. NextEnergy compiles relevant funding opportunities for focused toward energy, information, and scientific innovators and posts these opportunities on their website under Funding Opportunities.