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Michigan Approves $20M Small Business Relief Program - What you need to know.

Posted by John Inhulsen | Mar 19, 2020 | 0 Comments

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The Michigan Strategic Fund ("MSF") has approved the Michigan Small Business Relief Program to provide economic assistance for small businesses that have been negatively impacted by the COVID-19 virus.  

The Program authorizes the Michigan Economic Development Corporation to provide up to $20 million in support for small businesses. The funding is divided between $10 million in small business grants and $10 million in small business loans to support businesses facing drastic reductions in cash flow and the continued support of their workforce.

The grant funding will be provided to local or nonprofit economic development organizations throughout the state to provide grants up to $10,000 each to support certain small businesses that have realized a significant financial hardship as a result of the COVID-19 virus.

The loan funding will be provided to one or more Community Development Financial Institutions (“CDFI”) or a licensed SBA not-for-profit institutions (“Eligible SBA Non-Profit”), or directly from the MSF to eligible borrowers to be used to provide low-interest loans with flexible repayment terms to support certain small businesses statewide that have realized a significant financial hardship as a result of the COVID-19 outbreak. Loans to eligible borrowers must be $50,000 or more and are capped at $200,000.

Grants

In order to qualify for grant support, businesses must meet the following criteria:

  • The company is in an industry outlined in Executive Order 2020-9 , or any subsequent Executive Order of similar intent (“EO”), or demonstrates it is otherwise affected by the COVID-19 outbreak, as well as meeting additional criteria;
  • The company has 50 employees or fewer;
  • The company needs working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of business; and
  • The company is able to demonstrate an income loss as a result of the EO, or the COVID-19 outbreak.

Loans

In order to qualify for loan support, businesses must meet the following criteria:

  • The company is in an industry outlined in Executive Order 2020-9  (“EO”), or demonstrates it is otherwise affected by the COVID-19 outbreak, or is a company that provides goods and services to companies to the aforementioned;
  • The company has fewer than 100 employees;
  • The company needs working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of business;
  • The company can demonstrate that it is unable to access credit through alternative sources;
  • The company can demonstrate an income loss of as a result of Executive Order 2020-9.

Funds should be available no later than April 1, 2020. Loan and grant proceeds under the Michigan Small Business Relief Program may be used for working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of business.

About Inhulsen Law

Inhulsen Law is a boutique Michigan law firm focused on businesses, owners, and their related issues.  We work in partnership with our clients to promote their success by providing practical and cost-effective services.  To learn more call us at (616)747-0000, visit our website, on Facebook, or connect on LinkedIn.

About the Author

John Inhulsen

John Inhulsen specializes in providing strategic legal counsel on business and litigation matters, and is consistently recognized by Super Lawyers and Best Lawyers in America for his work.

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