Michigan Business Growth Fund Collateral Support Program

The intent of the Michigan Business Growth Fund Collateral Support Program (MBGF-CSP) is to supply cash collateral accounts to lending institutions to enhance the collateral coverage of borrowers. These accounts will cover all or a portion of a calculated collateral shortfall as described by the lending institution. Borrowers with a collateral shortfall will apply for coverage through the Michigan Economic Development Corporation (MEDC), which provides the administrative services for the program for the Michigan Strategic Fund (MSF). If approved, the MSF will deposit the cash into an interest bearing account with that lender and this account will then be pledged as collateral on behalf of the borrower. Based on an amortization schedule, the MSF will draw down the account as the loan principal is paid.
In the event of full default, the lender will have rights to the account less a liquidation fee.

To qualify, a business must be engaged with a private lender for the purpose of acquiring a commercial extension of commercial credit and must exhibit a collateral shortfall according to the lender’s analysis. Borrower must have no more than 750 employees and otherwise comply with all state and federal requirements for the program.