Grow Michigan Fund II is joining First Independence Bank and other financial institutions to bridge the economic gap for all with capital and advice for companies in Michigan
Grow Michigan, LLC, an organization founded in 2012 and dedicated to providing subordinate funding to small and middle market businesses with a commitment to Michigan. Grow Michigan Fund II today announced that half of its $200 million Grow Michigan Fund II will be allocated specifically for minority-owned businesses in the city of Detroit and statewide. The fund is working with Detroit-based First Independence Bank, one of the country’s largest African American owned banks, a consortium of other top area lenders, and the Michigan Strategic Fund.
Grow Michigan Fund II will actively identify opportunities to provide access to capital to qualified businesses, including minority-owned businesses, and assist lenders on how best to deploy the funds aimed at business growth and long-term sustainability. Key to the new fund allocation is an advisory board of successful business owners that will provide counsel to borrowers and identify opportunities within the community and large corporate minority supplier programs.
“We are looking forward to fostering inclusion and wealth creation and to providing opportunities like never before for a sector that has traditionally and historically been underfunded and underserved,” said Kenneth Kelly, Chairman and CEO, First Independence Bank and Chairman of Grow Michigan Fund II. “This fund represents one practical manner where we can positively affect change to support our economy and impact lives.”
Grow Michigan Fund II extends the capabilities of senior debt providers by offering a highly efficient, cost effective and complementary capital structure for growing Michigan small businesses in a broad range of industries – including manufacturing, distribution, transportation, life sciences and enabling technologies. To date, through Fund I, Grow Michigan has invested $61.7 million in transactions involving a total leveraged capital investment of $320.1 million, while facilitating nearly 3,200 jobs.
“During my time on the First Independence Bank board I saw first-hand their commitment to the Detroit community,” said Pat O’Keefe, one of the founders and CEO of Grow Michigan Fund II and the initiator of the revised business plan in collaboration with the bank. “They, along with other financial institutions who have embraced our concept, will serve as perfect partners for achieving our objective of providing access to real capital for minority business enterprises.”
“The need is there and the Grow Michigan formula – almost unlike anything else in the country – has proved itself,” added Kelly. “We want to lead the charge in assisting business growth and minority-owned companies formation through mergers and acquisitions in the middle market; providing the knowledge, relationships, and financial boost needed for success.”
Leon Richardson, founder and president of minority-owned Chemico Group in Southfield, is among the companies provided mezzanine financing by the first Grow Michigan fund. “We would never have reached our current level (nearly $200 million in annual sales) without their support,” he said.
Among the desired attributes of the companies Grow Michigan lends to:
- Profitable small businesses with strong management teams
- Established relationships with senior lenders
- Typical loan size between $500K and $5 Million
- Revenue from $3 million to $50 million and positive EBITDA
- Capital will lead to increased employment in Michigan
With access to large corporate minority supply programs to expand and grow the minority supplier base, and the formation of an advisory board of successful entrepreneurs, Grow Michigan will provide the infrastructure and capital banks have been unable to provide. Grow Michigan allows its financial partners to lever their pooled investment in a meaningful way as Grow Michigan’s capital leverages senior debt on average on a 5-1 basis making Grow Michigan the largest access to capital to minority owned businesses in Michigan and possibly the United States, which could in fact be scaled on a national basis.