Oakland County opens $500K microloan fund

Thursday, April 29, 2010 | Source: metromode

Microloan funds are spreading through Metro Detroit faster than the flu, with the latest outbreak taking place in Oakland County.

The Oakland County Microloan Program will provide loans of $500 to $35,000 to small businesses. It is modeled after the highly successful Michigan Microloan Fund run by Ann Arbor SPARK. The idea of the microloans is to help fill the capital void for small businesses that want to grow and create jobs but are being hampered by the nearly frozen credit lines of the financial industry.

"We expect the demand will be high for these loans because traditional lending channels are all but dried up for small businesses," says Maureen Krauss, director of Economic Development and Community Affairs for Oakland County. "There are a lot of people who want to start their own businesses."

Eligible businesses must be based out of Oakland County, pay a $75 application fee, have a business plan if they are under three years old, and at least two letters of denial from traditional lending sources. Owners must be current on child support, student loans, and income taxes.

Oakland County, in partnership with the Center for Empowerment & Economic Development and the U.S. Small Business Administration, is giving $100,000 towards creating the fund, as well as a $500,000 pool to start with.

The Michigan Microloan Fund draws from a $1.5 million pool and also from other six-figure funds provided by Washtenaw County and the city of Ann Arbor that are geared toward businesses in those respective communities. It expects to make 24-48 loans this year. Detroit's TechTown has also formed its own fund and Oakland University's OU INCubator is taking steps to set up its own program.

Source: Maureen Krauss, director of Economic Development and Community Affairs for Oakland County
Writer: Jon Zemke