DETROIT (AP) – Small and growing Michigan businesses will get new access to loans under a public-private partnership involving the state and Huntington Bank.
The Pure Michigan Micro Lending Initiative will begin with an initial $5 million financial commitment by Huntington Bank for a pilot program in Detroit. The funds will be allocated as a loan to the Detroit Development Fund, a nonprofit Detroit-based micro lender.
Gov. Rick Snyder on Monday helped launch the program, which is led by Huntington Bank and the Michigan Economic Development Corp. According to Snyder’s office, the target market for the program includes small businesses owned by women and minorities.
“This is the kind of innovative effort and collaboration that will help build a stronger Michigan and generate job growth by supporting small businesses and our state’s budding entrepreneurs.” Snyder said in a statement. “I am confident that early success in Detroit will quickly generate momentum in this initiative that activates further community partnerships and economic activity around the state.”
The MEDC will provide initial credit reserves in support of the program, enabling up to $225 million in further bank funding for additional loans statewide. Following the pilot program, Huntington Bank plans to commit an additional $20 million to distribute to micro lenders.
“Detroit is an ideal place to launch our new partnership with Michigan to help maximize neighborhood-by-neighborhood investment in the city,” said Mike Fezzey, Huntington Bank’s East Michigan president. “Huntington welcomes other banks to become involved as lending pool funders.”
Huntington Bank approached MEDC about possible interest in micro loans several months ago, at a time when MEDC was planning to create a micro loan support program. In October, MEDC received Michigan Strategic Fund approval for the Small Business Loan Program.
The U.S. Treasury Department on Friday signed off on using State Small Business Credit Initiative funds to support the state’s portion of the initiative.
Huntington Bank also was a founding partner in the MEDC’s Pure Michigan Business Connect, committing $2 billion in lending for commercial and small Michigan-based companies. Launched in 2011, Pure Michigan Business Connect also is a public-private effort.
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