Michigan Small Business Relief Program: Grants and Low-Interest Loans Available for COVID-19 Losses

In the wake of Governor Whitmer’s “Stay Home, Stay Safe” order, small businesses across Michigan have closed their doors, ceased their operations, and idled their workforces for the foreseeable future. The unprecedented challenges presented by the COVID-19 pandemic have left business owners in desperate need of financial assistance to sustain them through the crisis so that they can remain viable when it inevitably subsides.

In addition to emergency loans available through the U.S. Small Business Administration, the state of Michigan has established the Michigan Small Business Relief Program. The program authorizes the Michigan Economic Development Corporation (MEDC) to provide small businesses across the state with up to $10 million in small business grants and $10 million in small business loans. Business owners can use loan and grant proceeds from the program for working capital to support payroll costs, rent, mortgage payments, utility expenses, or similar expenses that arise in the ordinary course of business.

MEDC expects funds for the program to be available by April 1, 2020. You can apply for grants and loans through the program through the MEDC website.

Small Business Grants

Local or nonprofit economic development programs across Michigan will receive $10 million in grant funding that they will use to provide grants of up to $10,000 to support certain small businesses that have experienced significant financial hardship as a result of the COVID-19 pandemic.

Your small business must meet all of the following criteria to qualify for one of these grants:

• Your company is in an industry outlined in Executive Order 2020-9 (places of “public accommodation” other than grocery stores, pharmacies, healthcare facilities, etc.), or any subsequent Executive Order of similar intent, or demonstrates it is otherwise impacted by the COVID-19 pandemic, as well as meeting additional criteria.
• Your company has 50 employees or fewer.
• Your company needs working capital to support payroll costs, rent, mortgage payments, utility expenses, or other similar expenses that arise in the ordinary course of business.
• Your company can show an income loss as a result of the EO, or the COVID-19 outbreak.

Small Business Loans

The program also authorizes the MEDC to provide up to $10 million for small business loans. MEDC will provide the funding for these loans to one or more Community Development Financial Institutions (“CDFI”) or licensed SBA not-for-profit institutions (“Eligible SBA Non-Profit”), or directly from the Michigan Strategic Fund. In turn, these lenders will use the funds to provide eligible borrowers with low-interest loans with flexible repayment terms. Loans to eligible borrowers must be $50,000 or more but are capped at $200,000.

To qualify for this loan support, your business must meet all of the following criteria:

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

The MEDC anticipates that at least 1,100 businesses across Michigan will benefit from this program.

Call Us for Assistance With Small Business Loans and Grants Related to COVID-19

We know this is an unprecedented, unnerving, and uncertain time for business owners. Kreis Enderle remains steadfastly committed to providing guidance, counsel, and advocacy to help our clients weather the storm.

If you have questions regarding obtaining loans or grants through the Michigan Small Business Relief Program or have any other concerns or issues related to the COVID-19 pandemic, please contact the Business Law Practice Group at Kreis Enderle today.