What Does The SBA, The Dow and Michigan Have In Common? Well, late July the SBA formed a Public-Private Partnership with Dow to help Michigan small businesses grow and create jobs. The businesses can be Michigan-based or in the process of expanding their operations in Michigan They call it InvestMichigan! Mezzanine Fund and it’s the first licensed Impact Investment Fund in the SBA’s new Impact Investment Initiative.
In that partnership is also Michigan Growth Capital Partners, L.P., an investment partnership whose anchor investor is the State of Michigan Retirement Systems. They will provide up to $130 million of investment capital over the next five years to high-growth businesses. Credit Suisse’s Customized Fund Investment Group structured the InvestMichigan! Mezzanine Fund and will manage the fund in partnership with Beringea, a Michigan-based investment manager. Of the total funding, Dow will provide $15 million; Michigan Growth Capital Partners will provide $35 million; and SBA will provide $80 million.
The Impact Investment Initiative, a White House initiative (when it’s good, it’s a White House initiative; when it’s bad, it’s an Obama initiative!), is part of Startup America bringing together public and private organizations to accelerate the growth of America’s entrepreneurs. It will use the infrastructure of the SBA’s Small Business Investment Company Program (SBIC), an established and successful program that operates at no cost to taxpayers. This is incredible!
The SBIC program began in 1958 with the mission focusing on small businesses located in under-served communities or communities facing barriers to capital. In fiscal year 2010, the SBIC program provided $1.59 billion of financing to nearly 900 U.S. small businesses. This is noteworthy, when you consider the complaints from various voices in regard to SBA efficiency.