LLC has invested $51.1 million since 2013
BY MARK URBAN email@example.com Feb 28, 2018
BLOOMFIELD HILLS — A loan program will continue to provide growth opportunities for small businesses in the state.
Grow Michigan, LLC announced this week a two-year extension of the fund that has invested more than $51 million in 30 transactions since 2013.
The board of managers at Grow Michigan — which includes TraverseConnect chief executive officer Dougas Luciani — and the Michigan Strategic Fund approved extension of the fund.
“The program is working great,” said Patrick O’Keefe, CEO of Grow Michigan, LLC. “We’ve very excited to provide more opportunities for business owners in Michigan.”
According to a release, Grow Michigan reports that its leveraged capital investment of $353.2 million has facilitated the creation of nearly 3,000 jobs.
“Our charge as a fund is to invest solely in Michigan-based companies,” O’Keefe said. “The money we lend has to be used in Michigan and it has to create jobs.”
O’Keefe said the Grow Michigan works with financial institutions throughout the state, acting as a “second lien lender.” He said Grow Michigan loans are utilized by businesses to make up a lack of liquidity or capital in a typical bank lending transaction.
“We provide that level of gap control,” O’Keefe said.
Grow Michigan funding is capped at $5 million. O’Keefe said most loans are for between $1.5 to $2.5 million, with a repayment term of up to five years.
Of the 30 loans the organization has made, O’Keefe said more than half have been paid back — and none of those went the full five years.
Grow Michigan has worked with a pair of Grand Traverse area companies on loans of around $1 million each, O’Keefe said. Both of those were successfully repaid.
“We seed Michigan business opportunities when the banks can’t get there yet,” he said.
According to a release, the companies Grow Michigan lends to have the desired attributes of:
— Profitable small businesses with strong management teams
— Revenue from $3 million to $50 million and a positive EBITDA (Earns Before Interest, Taxes, Depreciation and Amortization)
— Capital investment leads to increased employment
— Established relationships with senior lenders