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SMALL BUSINESS FUNDING IN THE COVID-19 ERA: Tips for finding financial assistance, loans and grant opportunities for small business owners and entrepreneurs.

 

                    (This photo is licensed under CC BY 2.0 from SME Loans UK https://smeloans.co.uk/)

During the COVID-19 pandemic lockdown here in the United States, many have taken the shift to an online and socially distant economy as a chance to explore different opportunities and start their own businesses.

Still, the pause in traditional business has come with its own set of challenges. Entrepreneurs today face difficulties in gaining access to traditional sources of capital and funding opportunities to help them make critical upgrades, expansions, and capital investments. This guide hopes to alleviate some of that difficulty by canvassing some of the funding opportunities that are available to business owners and entrepreneurs today.

The following is a short list of COVID-era funding sources that are available for business owners and entrepreneurs in Detroit, Michigan. If you are not located in Detroit, your city or state may offer similar funding opportunities through a mix of private and public sources. Check out some of the funding sources that we list here and try keep them in mind if you expand your search to programs serving areas outside of Detroit, Michigan.  

1.               Loans

Perhaps the most familiar type of funding, loans are currently available through an assortment of public and private institutions. While access to a traditional bank loan may be difficult to obtain in the best of times, consider checking out some of the following loan offerors to see if they offer loans under criteria that you qualify for and on terms that you feel comfortable with.

·                 Small Business Administration Loans – The Small Business Administration (SBA) works to provide business owners with a variety of different borrowing opportunities to meet their needs. Check out the SBA website to get connected to a local lender partnered with the SBA. 

·                 Motor City Match Business Owner Awards – Motor City Match provides financial and/or technical assistance to business owners to help them “bridge the gap” between business ideas and a fully-fledged retail operations. 

 ·                 Detroit Community Loan Fund – The Detroit Community Loan Fund makes micro and small business loans to small businesses in Detroit, Highland Park and Hamtramck Michigan.

 ·                 Invest Detroit – Invest Detroit is a “mission-driven” lender whose small business program offers loans to support operational and property needs.

 ·                 Detroit Development Fund Small Business Loans – the Detroit Development Fund is a lending program that targets women entrepreneurs and entrepreneurs of color who lack the collateral or equity to qualify for financing from mainstream lenders.

 ·                 Match on Main Program – Match on Main reimburses small “place-based” businesses located on Michigan Main Street districts and Redevelopment Ready Communities. 

2.               Private Equity and Accelerators

Private equity refers to the body of investment activity driven by wealthy individuals or groups looking to invest in startups and small businesses with large growth potential. Investors in this field often frame their investment as a purchase of equity or convertible debt. Other organizations, known as “accelerators” or “incubators”, work closely with early-stage businesses by providing entrepreneurial support and venture financing. Private investment may be a viable source of funding for your business if it fits the investment profile of an investor or investors.

·                 Detroit Venture Partners – A Detroit-centric venture capital firm that supports early-stage tech companies. 

·                 Invest Detroit Ventures – The venture capital arm of Invest Detroit, ID Ventures connects startups with an entrepreneurial network that provides funding and support to scalable businesses. 

·                 gBeta Detroit – A 7-week accelerator for Detroit-based startups, that provides coaching, mentorship and funding opportunities. 

·                 TechTown Detroit – A Detroit-based incubator that takes idea-stage ventures to their next milestones by providing educational, networking and financial resources. 

3.               Grant Programs for Qualifying Applicant Populations

Grants are money awards given by governmental or private organizations designed to support specific locales, goals or industries. Grant programs can vary widely. One grant program might be run by a registered charity hoping to support artists and the arts. Another might be run by the state of Michigan and be designed to encourage the growth of manufacturing and engineering businesses in Detroit.

As you search for funding opportunities, it may be helpful to search for opportunities and organizations that provide targeted assistance for groups that you identify with. Some organizations, for example, provide relief for members of specific ethnic or religious communities. Others provide relief for populations of a certain age-range, like 60+ years-old Senior entrepreneurs. Keep an eye out for opportunities that are close to home in a literal and figurative sense. 

·                 Michigan Business Development Program – A financial program run by the Michigan Strategic Fund that provides grants, loans, or other financial assistance to highly competitive businesses in Michigan. 

·                 MCACA Grants – A fund issued by the Michigan Council for Arts and Cultural Affairs designed to support historical and artistic cultural activities in Michigan. 

·                 IFundWomen “She’s Next” Grants – A grant program run by I Fund Women, in partnership with Visa, that issues grants to black female entrepreneurs in major U.S. cities, including Detroit.  

4.               Workforce Development 

Workforce development funds are loans or grants specifically designed to support the hiring, training and retention of employees. Workforce development resources are sometimes available from Federal, State and local government programs, but also private philanthropic foundations and businesses.

·                 Michigan GOING PRO Talent Fund – A Michigan-based fund that awards funds to employers that train and develop transferable skills in their employees. 

·                 U.S. Dept of Labor Funding Opportunities – A variety of funding opportunities offered by the U.S. Dept. of Labor. 

·                 Detroit EDC Small Business COVID-19 Relief Grant Fund – A fund that seeks to support Detroit-based businesses affected by the COVID shutdown by issuing grants from $2,500 to $10,000. 

·                 Jobs Ready Michigan – A fund provided by the state of Michigan to help qualifying Michigan-based companies address workforce talent or training gaps. 

This list is not exhaustive and the availability of any one program may vary according to your circumstances. However, we hope that this article will serve as a good jumping-off point as you think about what kind of funding is best for your business and start on the process of finding the right resources. While funding will always remain a priority for business owners, be sure to keep an eye out for other resources that provide entrepreneurial support outside of funding. Some organizations and groups connect business owners with experienced entrepreneurial advisors. Others help entrepreneurs meet and engage with other business owners in their community. The needs of a small business are vast and ever-changing. Small businesses in need of legal support should consider applying to the University of Michigan’s Community Enterprise Clinic.


By: Aristotle Alsua

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