State micro-loan program expands to West Michigan

West Michigan businesses will soon have the opportunity to receive micro-loans for $1,000-$250,000 through the Pure Michigan Micro Lending Initiative.

Huntington Bank has pledged $5 million in microloans over the next five years, a move the bank expects to create more than 500 jobs.

“Our community is known for entrepreneurial heritage, and programs like Pure Michigan Micro Lending Initiative are another tool that we hope our residents will put to use,” said Jane Clark, West Coast Chamber of Commerce president. “We’re such an innovative community — many of our major employers have grown from an entrepreneur who took a risk and launched their business, and we’re excited about the next generation to come.”

Loans will be available in Ottawa and Allegan counties, among a total of 17 counties. The focus will be minority- and woman-owned businesses.

“Small business owners continue to be the backbone of economic growth throughout our communities,” said John Irwin, Huntington West Michigan region president, in a release. “We are grateful to our Pure Michigan Micro Lending Initiative partners for joining us to help more small businesses grow stronger and create jobs.”

The program was created in 2013 in collaboration with the Michigan Economic Development Corporation. The pilot was in Detroit, where almost $1 million has been lent; it was recently expanded to include Pontiac.

Huntington microloan pool funds will be lent through Opportunity Resource Fund. Business owners can be guided to the fund by working with either Grand Rapids Opportunities for Women or Michigan Small Business Development Center. The two organizations will help businesses prepare to apply for microloans, among other services.

“GROW is proud to support the Pure Michigan Micro Lending Initiative, as it will complement GROW’s existing SBA Microlending Program here and provide more funds to help minority- and women-owned businesses,” said Bonnie Nawara, GROW CEO, in a release. “Additional resources for microlending meaningfully increase capabilities for community partners in support of our small business community.”

Huntington allocates microloan pool funds through a line of credit to nonprofit community lenders like Opportunity Resource Fund, that then make microloans to business owners who are not yet able to access traditional financing because of limited operating history, lack of traditional collateral or insufficient credit history.

“We are excited to be working with Huntington to advance microlending opportunities to those unable to access traditional sources of capital in Michigan,” said Christine Coady Narayanan, Opportunity Resource Fund president and CEO, in a release. “This is an important step to get more small business owners on the ladder of credit so they can grow and flourish here.”

As the name implies, microloans are also often smaller than loans underwritten by traditional banks. Furthermore, all community partners will collaborate to help applicants prepare so they have the best chance of success in the microlending process and resulting use of a loan.

“The takeaway for small business owners in the community is that there are now more dollars for microlending,” said Dante Villarreal, West Michigan Region SBDC director, in a release. “To a small business owner, it’s not important where the money comes from, just that it’s available. A $5 million influx will make a big difference.”

— Follow this reporter on Twitter @SentinelJustine.