By: Jon Zemke
September 9, 2010
The number of loans from the First Step Fund has now hit double digits and is expected to go higher soon.
The TechTown-based microloan fund has made small loans to 10 companies across southeast Michigan. Those companies range from the Jimmy Kicks custom shoe operation in Detroit to Ann Arbor-based grant writing software firm InfoReady.
"We have been thrilled with the quality and quantity of applications," says Matthew Naegle, an associate with the First Step Fund.
Among the other companies to receive loans so far are Clean Emission Fluids (Detroit), Current Motor Company (Ann Arbor), Launch Learning Group (Detroit), Livio Radio (Ferndale), NextCat (Detroit), Air Movement Systems (Detroit), Coliant Corporation, and Bandals (Rochester Hills). More than half a million dollars in loans have gone to these companies over the summer.
Invest Detroit and Ann Arbor SPARK, which runs the Michigan Micro Loan Fund, created the First Step Fund earlier this year. The idea is to create a funding source for local start-ups starving for seed capital. The current credit crisis has resulted in traditional lending institutions cutting back on investment capital.
Each loan averages about $50,000 and is either short-term or in the form of a convertible note. Proceeds are usually used to push forward product development or expand inventory. Loan recipients are picked by a board independent of TechTown.
Source: Matthew Naegle, an associate with the First Step Fund