In an unpredictable business climate, successful companies are those with the flexibility, foresight and resources to turn adversity into opportunity. This became clear during the recession of 2007. According to Inc.’s 2013 Michigan Growth Census survey, the state’s sustained growers - those companies that have expanded net employment at least two of the past five years - outpaced their cohorts in sales growth by a wide margin. These companies, which in 2007 were about average in size among Michigan businesses, saw their sales grow to four times larger than average by 2012. (See “Outpacing Sales Growth,” below.)
Outpacing Sales Growth
Significantly, sustained growers are also far more likely than their peers to change from stand-alone to multi-location firms, an indication that they are not shying away from capital investment. “One of the most important considerations companies take into account when choosing where to locate or expand is access to capital,” says Mike Finney, president and CEO of the Michigan Economic Development Corporation (MEDC). To that aim, the MEDC makes available $100 million in loans to small and mid-size businesses at numerous stages of development.
Sustained growers don't have to go it alone
The MEDC has three major efforts underway, all designed to aid in the pursuit of sustained growth:
- Venture capital. Venture Michigan is a $95 million venture capital investment program designed to help create jobs and bring new industries to the state. “We’ve used Venture Michigan to leverage billions of dollars in private money to match the resources that come from the state of Michigan,” Finney says.
- Collateral support and loan participation. The State Small Business Credit Initiative (SSBCI) provides coverage when the underwriting of a loan isn’t sufficient to meet a bank requirement. “Since its creation, we’ve lent out $80 million dollars, leveraging another $600 million on top of that through bank lending,” Finney notes, adding that the highly popular program currently averages one transaction per day, with a near-zero default rate. Program success stories include National Pipeline Services, an engineering and maintenance company that was able to fund a $2.5 million expansion with $500,000 in coverage.
- Cash incentives for businesses looking to invest in urban communities or grow jobs. “We’ve found that these grants are more effective than traditional tax incentives, because they provide capital when and where it’s needed,” Finney says.
To learn more about how the MEDC helps small and mid-sized companies grow and thrive, check out all the available resources at the Pure Michigan site, www.michiganbusiness.org, or call 888-522-0103.