The Michigan Economic Development Corp., Michigan Strategic Fund and Michigan banking community have joined forces to form Grow Michigan LLC, a $60 million fund based in Plymouth that will offer subordinated debt to the state’s small businesses.
The fund has had a first closing of $30 million and expects to finish fundraising by the end of March, with $10 million coming from the Strategic Fund and $50 million from the member banks.
Those banks are the Michigan operations of Fifth Third Bank, PNC Bank, Huntington Bank and The Private Bank, as well as Troy-based Crestmark Bank, St. Clair-based Seaway Community Bank, theBank of Holland, the Traverse City-based Bank of Northern Michigan and Grand Rapids-basedMercantile Bank.
Grow Michigan also will make management advice available to businesses receiving capital.
The subordinated debt will be in conjunction with traditional bank loans and will range from $500,000 to $3 million, with a payback period of three to five years at interest rates generally below 10 percent.
The fund will invest only in deals brought to it by banks in Michigan and will be open to deals from all banks, not just those that are fund members. Each deal will be required to have some senior debt.
Grow Michigan was founded by local veterans of finance and banking — Mark Gregory, a former vice president at Comerica Bank who is now a consultant at Huntington; Russell Youngdahl Jr., former vice president of finance at Penske Transportation Inc.; David Treadwell, former CEO and president of Eagle-Picher Corp.; and Henry Brennan III, an attorney specializing in corporate finance and mergers and acquisitions.
Youngdahl is Grow Michigan’s CEO and Treadwell is chairman.
Tom Henderson, Crain’s Detroit Business.
