Incentives

Agency

Michigan
Economic
Development Corp.

Michigan
Economic
Development Corp.

Michigan
Economic
Development Corp.

Business
Resources
Group (BRG)

Program

Michigan Training Incentive Fund

Michigan Economic Growth Authority (MEGA)

High-Tech MEGA

Capital Access Program (CAP)

Use of Funds

Training of personnel

SBT credits

SBT credits

Virtually Any

Maximum

None

Up to 20 years

Up to 20 years

None

Program Loan Term

Set by Lender

-

-

Set by Lender

Program Interest Rate

Rate set by lender; prime rate

N/A

N/A

Set by Lender

Bank Participation

Bank receives guaranty of loan from agency

None

None

Bank makes the loan

Job Requirements

Current full-time personnel

In state company must create at least 50 new jobs; out of state 100 jobs

5 jobs initially; 25 jobs over next five years

None

Sponsor

MJC through Bank

-

-

-

Comments

Made only to existing Michigan companies

Business must be engaged in manufacturing, research and development, wholesale and trade or office operations.

MEGA may provide a refundable tax credit against the Single Business Tax (SBT) to companies expanding or relocating their operations in Michigan.

Must spend at least 25% operating budget on R&D; engaged in technology-based sectors; IT, life sciences, advanced mfg., MEMS, etc.

Barrower and bank pay a premium into a reserve fund. Cap matches the premium.

Program

SBA 504 Program

Tax-Exempt Bonds

Taxable Bonds

SBA 7(a) Program

Type of Program

Direct Loan/Bond

Bond Financing

Bond Financing

Loan Guarantee

Eligible Businesses

Existing businesses Profits <$2 MNet worth <$6 M

Manufacturing projects only. Generally stronger credit companies

Manufacturing, commercial, or service businesses. Can finance weaker credits

Existing or start-up businesses. Can finance weaker credits

Use of Funds

Fixed assets only

Fixed assets only

Fixed assets only

Working capital or fixed assets

Minimum/
Maximum

$750,000

$1-10 Million

$1 -10 Million

Maximum varies; typically $750,000

Program Loan Term

10 & 20 years based on asset life

15-20 years; based on asset life and LOC

10-20 years; based on asset life and LOC

WC: 18 mos-2 years equipment; 5-7 years greenline WC loan. Based on bank term

Program Interest

T-Bonds + 1.5% Fixed Rate

65% of Bank's conventional rate

Based on bank letter of credit; T-Bond + 1%

Bank's rate; prime + 1-2%

Program Collateral:

2nd mortgage; personal guarantee

1st mortgage; bank LOC; personal guarantee

1st mortgage; bank LOC; personal guarantees

Bank Participation

50% of project

Bank provides letter of credit for bond

Bank provides letter of credit for bond

Bank receives guaranty of loan from agency

Job Requirements:

1 job/$35,000

Job impact certified

N/A

N/A

Equity:

10% of project

10% of project

10-30% of project

10-30% of project

Sponsor:

SBA through local CDC

IRS; Bond Counsel; CIC

Bond Counsel; CIC

SBA through Bank

Comments:

Primarily for healthy growing businesses

High cost of issuance

High cost of issuance

Can take greater risk

Program

SBA LowDoc Program

Linked Deposit Programs

Micro Loan Program

Type of Program

Loan Guarantee

Rate Subsidy

Loan

Eligible Businesses:

Small businesses (100 or fewer employees)

Usually finance only businesses in the state

Women, low inclome and minority

Use of Funds:

Capital; start-up costs; fixed costs & working capital

Working capital or fixed assets

Working capital, inventory, supplies, machinery/equip

Minimum/
Maximum

$100,000 maximum

Generally smaller projects

$25,000 maximum

Program Loan Term:

See SBA 7(a) Program

1-2 year Cert. of Dep.

Maximum 6 years

Program Interest Rate:

See SBA 7(a) Program

Bank's rate minus 1-3%

Maximum of prime + 4%

Program Collateral:

See SBA 7(a) Program

None; Bank gets collateral requested

1st lien on assets; personal guaranty

Bank Participation:

Bank receives guaranty of loan from agency

Match funding through CD

-

Job Requirements:

N/A

N/A

N/A

Equity:

See SBA 7(a) Program

N/A

N/A

Sponsor:

SBA through Bank

Treasurer

Ann Arbor Community Development Corp

Comments:

LocDoc requires a one-page application form

Treasurer takes no credit risk; buys CD at lower rate

Contact Ann Arbor Community Development Corp - 734 677-1400