New Micro Lending Program to Pump Cash into Detroit
Amid the Motor City’s ongoing bankruptcy eligibility trial, the launch of a new lending program is likely welcomed news for Detroit small businesses.
Earlier this week, Columbus, Ohio-based Huntington Bank announced the launch of the Pure Michigan Micro Lending Initiative – and committed $25 million to the program. Five-million dollars in lending, which is scheduled to begin immediately, has been earmarked specifically for Detroit businesses.
Pure Michigan is a collaboration between the state of Michigan and Michigan Economic Development Corporation (MEDC). MEDC president and CEO Mike Finney says the goal is to line up other financial institutions to eventually make as much as $250 million in microloans available to small businesses in the state.
Finney says community businesses such as small shops, salons and restaurants stand to benefit from the program. Loans will range from a few thousand dollars on the low end to approximately $100,000. The Initiative will be working with established micro lending institutions, like the Detroit Development Fund, to actually process the loans.
Huntington Bank regional director Jim Dunlap says conversations about the program first began six months ago. Detroit is the largest market for Huntington Bank, and Dunlap says the six-state retail banking franchise saw this as a great opportunity to make a major impact on the cash-strapped city. In 2011, the bank announced a $2 billion loan commitment to businesses in Michigan.
While Dunlap says the bank has not done research on the economic effect of microloans, he says the benefit is clear.
“By helping these businesses get started and employ people … it will automatically generate economic activity,” says Dunlap.