MI Businesses First to Benefit From New U.S. Investment Initiative

7/26/11Follow @XconomyDET

The U.S. Small Business Association (SBA) today announced a partnership with Dow Chemical and state investment funds to help finance second-stage growth companies in Michigan, the first state in the nation to take part in the new nationwide investment initiative.

The InvestMichigan! Mezzanine Fund, part of the $1 billion Start-Up America Impact Investment SBIC Initiative, will pump up to $130 million in debt and equity funding into lower-middle-market Michigan companies over the next five years.

Karen Mills, SBA Administrator, said in a conference call that Michigan was selected as the first state to receive funding through this public-private venture not only because of high unemployment, but because the state’s economy is in transition.

“Michigan has great assets: the highest number of engineers per capita in the nation, great universities, a strong culture of entrepreneurship and a talented workforce,” Mills said “Two out of three jobs are created by small businesses, and data shows that high-growth firms are responsible for the lion’s share of these jobs.”

The mezzanine fund will make investments of $5 million to $15 million in companies with $20 million or more in annual revenue. Kelly WilliamsManaging Director and Head of Credit Suisse’s Customized Fund Investment Group, says the fund is targeting businesses across many sectors, though she expects manufacturing to be at the forefront given Michigan’s historical strengths and expertise in the field. Williams went on to say the first deal under the initiative will be announced in a few weeks and will probably be a company involved in food distribution.

Michigan companies interested in being considered for financing from the InvestMichigan! Mezzanine Fund can call fund co-managers Credit Suisse at (248) 619-1868 or Beringea at (248) 489-9000.

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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