In addition to state and local organizations that promote small businesses, nonprofit SCORE has several offices in the state to provide mentoring to aspiring entrepreneurs. The SBA also steps in with its Small Business Development Center to provide advice and make suggestions with preparation for financial planning and funding. The state-funded Michigan Economic Development Corporation stands ready to provide even more business resources and suggestions for financing small businesses.

If you think your business may qualify for a grant, you can start your search at the federal site Grants.gov. For grants more specific to the state of Michigan, you can visit the Michigan Labor and Economic Opportunity site which describes grants to small businesses for specific purposes, such as building up exports.

The Michigan Business Development Program offers grants and other economic assistance to businesses that create qualified new jobs — 25 in rural areas and 50 in standard areas.

Motor City Match offers grant funding of up to $100,000 to new and expanding businesses in Detroit.

Motor City Restore – now part of Motor City Match – offers grants of up to $25,000 to cover 50% of total project costs for improvements to business storefronts.

The first step is to decide on your business structure. You can start out as a sole proprietorship and you’ll need to register the name of the business with the county of operation. If you decide on a corporation or a Limited Liability Corporation (LLC), you need to register your company with the Michigan Secretary of State. You’ll also need to check local and state regulations to see if you need any specific permits or licenses.

After taking care of the paperwork, you need to prepare the documentation that your lenders require. Typically, you’ll need a business plan, financial statements, and cash flow projections. Your financial projections should show why you need the loan and how you intend to pay it back.

The type of loan depends on its purpose. If you have a seasonal business and experience temporary increases in accounts receivable and inventory, a revolving line of credit will likely work. If you’re looking to purchase a piece of equipment, equipment financing could be a good fit. The financial consultants at online platforms like Lendio can give you advice and help you decide in just a few minutes which loan works for your situation—and at no cost to you.

Banks and nonprofit organizations in Michigan want to provide funds to small businesses that increase economic activity in their communities. Everyone gains when new businesses startup and existing businesses expand and add more employees. The availability of funds for small businesses to finance their operations is critical for the growth of local economies.

An SBA preferred lender is a lender that’s been approved by the Small Business Administration to administer SBA loans without additional approvals from the SBA. Typically these lenders have years of experience and can approve SBA loans faster than non-preferred lenders.

SBA loans are backed by the government and offer lower interest rates than other types of small business loans. They typically require a minimum time in business of two years and a credit score of 650+.

An SBA 7(a) loan is a form of financing that is partially guaranteed by the SBA. These loans are named after article 7(a) of the Small Business Act of 1953, which launched the SBA and tasked the agency with supporting American small businesses through lending. You can learn more about the SBA 7(a) loan on our blog.