Ann Arbor SPARK isn’t going to be the only economic development agency with a microloan fund, now that Oakland University’s INCubator is taking steps to create its own.
“During the spring and summer months we will be forming the microloan fund and seeking interested investors to initiate that fund,” says David Spencer, executive director of the Oakland University INCubator. “As soon as that fund is fully formed we will be seeking candidates interested in participating with this new program.”
Right now it’s working out an agreement with the Rochester Downtown Development Authority. After that is finalized, the INCubator will begin fundraising efforts with a goal of raising $300,000-$400,000 in private sector cash. The Rochester DDA might also choose to match a portion of this fund up to $100,000. Spencer also stresses that the INCubator will not begin taking applications for loans until the fund is formed and an announcement saying as much is made.
After the money is raised the INCUbator will identify key emerging sectors to target with the money, such as Medical Mainstreet. It could also identify retail businesses that would be attractive to bring to downtown Rochester that currently don’t exist.
Microloan funds make loans from between a few thousand to tens of thousands dollars to small businesses, usually of the new economy kind. Ann Arbor SPARK administers Michigan’s Microloan Fund, plus a few geared specifically for Washtenaw County and Ann Arbor businesses.
The INCubator’s microloan fund will provide loans from $5,000 to $50,000 to entrepreneurs, early stage ventures, and growth companies in an effort to attract more new companies to the northern Oakland County area. Organizers anticipate the loan fund will be available in the next 12-18 months.
The $1.5 million Michigan Microloan Fund Program is made up of three distinct microloan funds, including the Eastern Washtenaw Microloan Fund ($225,000), Michigan Pre-Seed Capital Fund ($1 million), and the Ann Arbor/Ypsilanti Local Development Financing Authority ($275,000). The Michigan Microloan Fund Program, which is administered by Ann Arbor SPARK, has distributed $911,500 to 23 companies since last year.
Source: Oakland University and David Spencer, executive director of the Oakland University INCubator
Writer: Jon Zemke