Nearly $100M Now Available for Small Business & Tech Startups
July 5, 2023
Article courtesy MIRS News for SBAM’s Lansing Watchdog e-newsletter
Small businesses and high-tech start-ups will be able to take advantage of nearly $100 million in grants under programs approved Tuesday by the Michigan Strategic Fund Board.
The Small Business Support Hubs program had $75 million allocated to invest in small businesses and the Michigan Innovate Capital Fund program had $23 million allocated for nonprofits that help high-tech startups.
“Thriving small businesses are vital to our state’s economy, and these federal funds will provide economically disadvantaged entrepreneurs and small businesses with timely financing to build up their business, create jobs for their friends and neighbors and support their community’s vibrancy along the way,” said Gov. Gretchen Whitmer.
The Small Business Support Hubs funding came from a one-time appropriation of American Rescue Plan Act (ARPA) funds. The program would provide up to $6 million in funding for nonprofits, or direct grant support to small businesses disproportionately impacted by the COVID-19 pandemic.
Those hubs would offer a physical location that helps with training, resources, one-on-one coaching, consultations, workshops, seminars, incubation activities, and networking events.
“Just be careful that we don’t drop money on a particular spot and then burn through it in a year and then it’s gone and the program is dead. These things do take time, it’s kind of like planting a garden and it needs time to mature,” said MSF Board member Charlie Rothstein.
Applications can be turned in between July 10 and Sept. 8. A webinar to further explain the process can be found on the Michigan Economic Development Corporation (MEDC) website.
ARPA Funding needs to be allocated before Dec. 31, 2024, and has to be spent before the same date in 2026.
The concept for the program came from the MI New Economy Plan put forward by Whitmer in 2021, but the end result was shaped by an MEDC team that held 13 virtual workgroups with 120 organizations, according to a press release from the governor’s office.
The Michigan Innovate Capital Fund Program would also be given to nonprofit organizations to help invest in pre-seed and startup-stage technologies that require capital to get into the commercial space.
The money for the program would come from the Jobs for Michigan investment fund.
Eligible companies could get up to $5 million. Nonprofits that have received prior support from the MEDC or MSF can apply. Also able to apply are nonprofits that deploy capital exclusively in Michigan and can demonstrate how they would use the funding to create jobs and drive sustained long-term growth.
MEDC Senior Vice President of Entrepreneurship and Innovation Fredrick Molnar said he estimated that $20 million would go to the applicants who are already established with the MEDC and $3 million would go to new applicants.
Nonprofits in underserved locations that address funding gaps in underrepresented industries would be given preference.
“Our small businesses are the backbone of our nation’s economy, and here in Michigan, we’re committed to doing all we can to provide the support, resources, and opportunities they need to grow and thrive. The programs approved today are yet two more examples of how we’re working to invest in the small businesses and entrepreneurs in our state,” Molnar said.