Banks & Similar Lending Institutions
 

A bank loan is one of the more common forms of small business financing.  A bank may make a loan completely on its own or may seek participation from the Small Business Administration (SBA).  SBA loans are described further in this section. 
 

Listed below are banks with a branch in Osceola County.  Also listed is the GreenStone Farm Credit Services branch that serves Osceola County.  GreenStone provides short, intermediate, and long-term loans to the agricultural industry.

Contact:

Chemical Bank  
840 S. Chestnut                           9568 US-10

Reed City, MI 49677                    Evart, MI 49631
(231) 832-3211                            (231) 734-5532

Citizens Bank  

107 N. Pine St.                           120 Mackinaw Trail                      201 E. Main St.

Evart, MI 49631                           LeRoy, MI 49655                         Marion, MI 49665

(231) 734-5582                           (231) 768-4489                           (231) 743-2491

An individual from the Marion branch of Citizens Bank is a member of the Osceola County Brownfield Redevelopment Authority, Board of Directors.

GreenStone Financial Services  

7597 S. Mackinaw Trail
Cadillac, MI 49601
(231) 775-1361

Huntington National Bank  

214 W. Upton

Reed City, MI 49677

(231) 832-5534

Lake-Osceola State Bank

217 S. Chestnut                            109 E. Church St.

Reed City, MI 49677                     Tustin, MI 49688

(231) 832-0022                             (231) 829-3351

Business & Industry Guaranteed Loans

The Business and Industry (B&I) Guaranteed Loan Program is a United States Department of Agriculture (USDA) program that guarantees loans made by eligible lenders to rural businesses.  In partnership with commercial lenders this program allows businesses to obtain higher loan amounts, lower interest rates, and longer repayment terms.

The B&I Guaranteed Loan Program does have a maximum guarantee limit and the percentage of the guarantee is tied to the size of the entire loan; 80% for loans of $5 million or less, 70% for loans over $5 million and up to and including $10 million.  Special approval is required for loans over $10 million.

Interest rates for B&I Guaranteed Loans may be fixed or variable.  The rate is negotiated between the borrower and lender.  Variable rates cannot be adjusted more than quarterly.  Additionally, in order to access the program the lender pays a one-time guarantee fee of 2%.  This fee may be passed on to the borrower. 

The maximum repayment terms are 7 years for working capital; 15 years or useful life for machinery and equipment, whichever is less; and 30 years for real estate.

The B&I Guaranteed Loan Program can be used for many business purposes; however, there are several limitations.  The Business Programs section of the USDA Rural Development website provides more information on the Business & Industry Guaranteed Loan Program as well as other USDA Rural Development business programs.
 

Contact:
 

United States Department of Agriculture
1501 Cass St., Suite A
Traverse City, MI 49684
(231) 941-0951 ext. 128

Capital Access Program
 

The State of Michigan has reestablished the Capital Access Program (CAP) in an effort to assist small businesses with their financing needs.  The program is for use by companies that need assistance in obtaining a loan from a traditional financial institution.

The program can be used to finance most types of business; however, CAP loans can not be used for construction, renovation, the purchase of residential or rental housing, or rental property.  The loan can even be used as a line of credit.  The only restriction on the size or term of the loan is a maximum loan amount of $5 million..

Participating banks offer the Capital Access Program directly to companies that need credit enhancement.  The State, along with the bank and borrower, pay a small premium into a loan loss reserve fund; however, the loans under the program are strictly private transactions between the bank and borrower.  In other words, the borrower must meet the banks loan criteria and it is the banks decision whether or not to make the loan.

There are over 80 financial institutions in Michigan participating in the program.  Go to the Capital Access Program section of the Michigan Economic Development Corporation website to learn more about the program and see which banks participate. 
 

Contact:
 
Michigan Economic Development Corporation
300 N. Washington Sq.
Lansing, MI 48913
(517) 373-9808

 Certified Development Companies (CDCs), SBA 504 Loans
 

The CDC/504 loan program is a long-term financing tool, designed to encourage economic development within communities.  The program is administered through a Certified Development Company (CDC).  Using the SBA 504 loan program a CDC works with the SBA and private-sector lenders to provide growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. 

Preferred projects range from $250,000 to $10 million.  The maximum SBA contribution on any project is generally $1.5 million; however, the maximum is increased to $2 million for projects attaining a public policy goal, and $4 million for manufacturing projects.

Information on program eligibility, maximum loan amounts, loan terms, collateral, and the use of funds is available on both the Michigan Economic Development Corporation (MEDC) and Small Business Administration website.  

Contact:
 

Refer to the Michigan Economic Development Corporation website for a list of Michigan based SBA 504 CDCs.

 Community Development Financial Institutions

Community Development Financial Institutions (CDFIs) are financial institutions that have community development as their primary mission.  They develop a range of strategies to address their mission.

One typical aspect of a CDFI's mission is to provide business loans in selected areas of the State.  Osceola County is served by one CDFI, Northern Michigan Initiatives. 

Northern Michigan Initiatives can provide financing for either start-ups or existing businesses.  Loans range in size from $2,000 to $500,000. 
 

Contact:

Northern Michigan Initiatives
322 E. Cedar St.
Boyne City, MI 49712
(906) 250-8861  

 Intermediary Relending Programs
 

Intermediary Relending Programs 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.

Osceola County is served by several Intermediary Relending Programs.  Eligibility criteria as well as minimum and maximum loan amounts vary between each program.

Great Lakes Energy

Great Lakes Energy offers an Intermediary Relending Program which loans up to a maximum of $100,000.  There is no minimum. 

At the discretion of the Great Lakes Energy Board of Directors, the interest rate on these loans varies from one-half of the prime rate at the time of the loan approval to one-half plus 2%.  Great Lakes Energy can finance 30% of the total project (not to exceed $100,000), with a financial institution financing 50% of the total project, and the applicant having a 20% equity.  The loan term is set to match that of the participating financial institution, up to 10 years. 

Any "for profit business" can apply; however, job creation will be considered as a factor when reviewing the application.  Applications are reviewed quarterly.

The Northern Lakes Economic Alliance administers the program on Great Lakes Energy's behalf.  To obtain complete information on the program contact the Northern Lakes Economic Alliance.

Rural Michigan Intermediary Relending Program

As its name indicates the Rural Michigan Intermediary Relending Program operates an  Intermediary Relending Program.  This program uses funding from the United States Department of Agriculture.

The minimum loan made is $50,000 and the maximum loan is $200,000.  Individuals interested in the program should contact the Rural Michigan Intermediary Relending Program for other loan terms.

Contact:
 

Northern Lakes Economic Alliance
(231) 582-6482

ni@northerninits.com

Rural Michigan Intermediary Relending Program

121 E. Front St.

Suite 201

Traverse City, MI 49783

(231) 941-5858 or (888) 778-2778

 Microloans

Microloans assist in the development of existing and new small businesses by providing loans for as little as $500 up to $35,000.  Proceeds can be used for typical business purposes and loan terms vary between programs.  There are several microloan programs serving Osceola County residents.

Rural Michigan Intermediary Relending Program

The Rural Michigan Intermediary Relending Program receives funding from both the Small Business Administration (SBA) and the United States Department of Agriculture.  The Rural Michigan Intermediary Relending Program is able to use its SBA funding to operate a microloan program.

The minimum loan made is $5,000 and the maximum loan is $35,000.  Individuals interested in the program should contact the Rural Michigan Intermediary Relending Program for other loan terms.

Northern Michigan Initiatives

The Northern Michigan Initiatives is actually a Community Development Financial Institution; however, some of their loans are very similar to microloans.  Minimum loans made by Northern Michigan Initiatives begin at $2,000.
 

Contact:
 

Northern Michigan Initiatives
322 E. Cedar St.
Boyne City, MI 49712
(906) 250-8861

Rural Michigan Intermediary Relending Program

121 E. Front St.

Suite 201

Traverse City, MI 49783

(231) 941-5858 or (888) 778-2778

 Private Activity Bonds (formerly Industrial Development Revenue Bonds)

Private Activity Bonds are a form of tax-exempt financing similar to that which might be used when financing a public facility which generates a revenue stream.  What makes this type of financing attractive is that it provides profitable firms with cost savings because of the difference between taxable and tax-exempt interest rates.

Private Activity Bonds can be used for manufacturing projects, not-for-profit corporation projects, and solid waste facilities; however, certain restrictions apply.  For manufacturing projects, bond proceeds can only be used to acquire land, building and equipment directly related to the manufacturing process.  Warehouse space and other "non-core" items are ineligible unless they are directly related to the manufacturing process, and then are limited to 25% of the project.  At least 70% of bond proceeds must be spent on "core manufacturing" costs. If you acquire existing facilities, a minimum of 15% of the bond proceeds must be used to renovate the facility.  Used equipment is generally ineligible.  Loans for such purposes as working capital or inventory are not permitted.    

There is also a maximum amount that can be borrowed using Private Activity Bonds.  Up to $1,000,000 can be borrowed free of any restrictions on capital expenditures or up to $10,000,000 can be borrowed with spending conditions.  There is no limit for solid waste disposal facilities or nonprofit corporations.

A Private Activity Bonds fact sheet on the Michigan Economic Development Corporation website provides more information such as who is eligible, the application process, and fee schedule.
 

Contact:

Michigan Economic Development Corporation
300 N. Washington Sq.
Lansing, MI 48913
(517) 373-9808

Small Business Administration (SBA)
 

The Small Business Administration (SBA) has a number of different programs to help meet the needs of small businesses.  As such the SBA is the largest source of long-term small business financing in the nation.  The SBA does not lend directly to borrowers.  Instead it guarantees a portion of the loan in the event the borrower does not repay the loan. 

SBA 7(a) Loans

The most basic and commonly used is the SBA 7(a) loan.    These loans are provided by lenders who choose to structure their own loans by SBA's requirements and then apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guaranty 7(a) loans. The lender and SBA share the risk that a borrower will not be able to repay the loan in full.  Under the guaranty concept, commercial lenders make and administer the loans.

A typical scenario would involve the business applying to a lender for financing.  The lender would then decide if the loan should be made, and if so, if it should make the loan internally or if the application has some weaknesses which, in their opinion, will require an SBA guaranty.  The guaranty which SBA provides is only available to the lender.  It assures the lender that in the event the borrower does not repay their obligation and a payment default occurs, the Government will reimburse the lender for its loss, up to the percentage of SBA's guaranty.  Under this program, the borrower remains obligated for the full amount due.

All 7(a) loans with an SBA guaranty must meet 7(a) certain criteria. The business gets a loan from its lender with a 7(a) structure and the lender gets an SBA guaranty on a portion or percentage of this loan. Hence the primary business loan assistance program available to small business from the SBA is called the 7(a) guaranty loan program.

Since the SBA does not loan directly to businesses anyone seeking SBA financing must first meet the requirements of a bank or other lending institution that participates in SBA programs.  Once an individual is eligible for financing from their bank they must then meet the eligibility requirements of the SBA..  SBA considerations include repayment ability from the cash flow of the business, good character, management capability, collateral, and owner's equity contribution.  As you can see from the Michigan Economic Development Corporation (MEDC) bulletin below (insert box) an SBA 7(a) loan is one of the more popular forms of small business financing. 

All businesses seeking a 7(a) must be for-profit, meet SBA size standards, not already have the personal or business resources to provide the financing, and be able to demonstrate an ability to repay the loan.  The SBA website has more detailed information concerning:

• Eligible and Ineligible Types of Businesses

• Size Criteria

• Use of Proceeds

• Availability of Funds from Other Sources

• Maximum Amounts

• Loan Terms (rates, maturity, prepayment penalty, fees

Read more about the SBA's 7(a) loan program.

Special Purpose Loans

The SBA offers a number of special purpose loans that, unlike the 7a program, are targeted to a very small defined audience. 

Export Working Capital:  The SBA's Export Working Capital Program (EWCP) supports export financing to small businesses when that financing is not otherwise available on reasonable terms.

International Trade Loans:  To qualify for these loans an applicant must establish that the loan will significantly expand or develop an export market, is currently adversely affected by import competition, will upgrade equipment or facilities to improve competitive position, or must be able to provide a business plan that reasonably projects export sales sufficient to cover the loan.

Pollution Control:  The program is designed to provide financing to eligible small businesses for the planning, design, or installation of a pollution control facility. This facility must prevent, reduce, abate, or control any form of pollution, including recycling.

CAPlines:  The SBA's CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs.

Summary

Its beyond the scope of this website to fully discuss the purpose, eligibility requirements, and specifics of each SBA program.  To learn more about SBA programs visit their website or contact a commercial lender.

Contact:

Small Business Administration  
(313) 226-6075

 Rural Economic Development Loans

The United States Department of Agriculture has partnered with the Great Lakes Energy Cooperative in an effort to spur rural economic development that has a long lasting effect.  As a result, Osceola County businesses and start-ups have access to the Great Lakes Energy Zero Interest Loan Program.

The Zero Interest Loan Program is a fantastic opportunity for companies seeking large scale financing for projects that will create jobs in rural communities.  Any "for profit" business can apply.  The minimum loan amount is $100,000 and the maximum loan amount is up to $600,000.  Great Lakes Energy's participation can not exceed 30% of the total project. 

Great Lakes Energy can finance 30% of the total project (not to exceed $600,00), with a financial institution financing 50% of the total project, and the applicant having a 20% equity.  The loan term is set to match that of the participating financial institution, up to 10 years.

Any "for profit business" can apply; however, job creation will be considered as a factor when reviewing the application.  There is an expectation that one job will be created for every $10,000 borrowed.  Applications are reviewed quarterly.

The Northern Lakes Economic Alliance administers the program on Great Lakes Energy's behalf.  To obtain complete information on the program contact the Northern Lakes Economic Alliance.
 

Contact:
 

Northern Lakes Economic Alliance
(231) 582-6482
lisa@northernlakes.net

 Venture Capital

Equity capital is the financing made available for investment in promising firms but with a risk of exposure greater than what is acceptable to traditional institutional lenders. Financing is provided by sophisticated investors who seek investments that hold the prospects for large capital gains.

Such investors are referred to as venture capitalists or Angel investors. Venture capitalists may be: a) privately owned firms licensed and regulated by the U.S. Small Business Administration or; b) non-regulated firms. The former group is known as Small Business Investment Companies (SBICs). SBICs provide financing in the form of equity capital, debt financing with an equity sweetener, and in some cases, straight long-term loans. The non-regulated firms, which specialize in equity financing, are referred to as Venture Capital Companies (VCCs).

A list of Venture Capital Companies doing business in Michigan can be found in the Michigan Business/Organization Directory section of the Michigan Economic Development Corporation's website.  
 

Contact:

Michigan Economic Development Corporation
300 N. Washington Sq.
Lansing, MI 48913
1-517-373-9808