Michigan Resources for Business and Economic Relief

This article was updated on June 25, 2020.

What is Michigan Doing to Help?

It is an unfortunate fact that Michigan is one of the states hit hardest in terms of total number of COVID-19 cases. Current case numbers can be found through Google’s tracking tool.

An initial lack of resources combined with a skyrocketing infection rate in the early days of the pandemic severely limited the state government’s ability to get ahead of the issue in any meaningful way. Then, under a stay-at-home order, protesting Michiganers spread the virus throughout the state and beyond.

To aid affected local businesses, the Michigan Economic Development Cooperate has created a number of aid programs that small businesses might qualify for, including:

MSF Awardee Relief Initiative – This is an emergency relief aid for community projects that received previous funding.
PlanetM COVID-19 Mobility Solutions Grant – This grant can be awarded to businesses who are addressing mobility challenges in the state of Michigan.
Metro Community Development Loans – Business loans from $5,000 to $250,000 are available for Michigan businesses in economically disadvantaged areas.

Recently, the state has begun processing backlogged unemployment insurance claims by dispersing funds allocated to them by the federal government through the CARES Act.

What is the Federal Government Doing to Help?

The federal government understood very clearly in mid-March that the vast majority of state governments were ill-equipped to handle a disaster of this magnitude with the resources already available. In response, Congress passed the Coronavirus Aid, Relief, and Economic Securities (CARES) Act which includes over $2 trillion in funding to supplement state efforts already in motion.

As part of this aid package, $350 billion was allocated for the purpose of helping small businesses who have suffered as a result of the COVID-19 outbreak. The items reserved for businesses were set up as a series of grants, loans, and debt forgiveness options which, in combination, might just be enough to see a significant portion of local businesses through to reopening

The second round of funding came just weeks after, in a $484 billion coronavirus relief package. A large portion of this ($310B) was allocated to refueling the Paycheck Protection Program.

Paycheck Protection Program (PPP)

The Paycheck Protection Program is the first aid package that most businesses should hope to take advantage of, because not only will you receive funding for daily operations upon approval, but you might not even have to pay it back.

Initially, funding under the PPP is awarded as a business loan, which, under normal circumstances, you would pay back within a specified term. However, the terms of the loan stipulate that should your business meet certain operational criteria, your loan may be converted into a grant.

The terms are rather simple, and include two main steps:

First, all employees must be retained on the payroll for 8 consecutive weeks.
Second, you must use the funds for the following functions only:
- Rent payments
- Payroll disbursement
- Utility costs
- Mortgage interest

These criteria are not intended to disqualify any business from receiving the loan. They are meant to incentivize businesses to use them for the purposes that have been deemed most integral to sustaining operations.

In June, congress passed the Paycheck Protection Program Flexibility Act of 2020, creating further flexibility in how PPP funds are used and how they can be forgiven.

The PPP is just one example of the resources that have been made available by the federal government. For more information on grants, loans, and debt forgiveness, start here.

COVID-19 in Michigan

Local businesses are the pillars of any community. They are the places where many make their living; where neighbors gather for important events; they are the engines that keep the local economy running; they form the local identity.

While this point in history may prove the most difficult in your professional life, take comfort in the fact that local communities, the State of Michigan, and the U.S. government have a vested interest in the survival of businesses.

How Has COVID-19 Affected Michigan?

The emergence of COVID-19 has turned the business landscape in the state of Michigan into more of a deserted moonscape.

Businesses both large and small have shut their doors, while others sputter along on fumes, seeking out funding to fuel themselves further. Unemployment levels reached an all-time high in April, topping topping 22% unemployment , officially surpassing numbers at the height of the Great Recession.

When the number of new unemployment claims began to surge, it quickly became apparent that the state did not have the infrastructure in place to handle anywhere near this level of emergency. Servers at the state unemployment office were almost immediately overloaded, causing a massive backlog of unfiled claims and frustration amongst the unemployed.

Local businesses haven’t been spared either.

Effect on Local Business

The effects to small businesses closely mirror those of the general populace. Even as strict stay-at-home orders are lifted during phased reopening, businesses will continue to operate at reduced capacity.

As a result, local businesses have been forced to reform their business models if they wish to have any hope of a sustained future. However, even those who successfully reinvented their business model to remain productive still find themselves struggling, so they too must look to governing bodies and their communities for assistance.

Reopening Businesses in Michigan

Governor Whitmer’s six-phase reopening plan focuses on opening slowly and safely. The phases are as follows:

Phase One is a strict stay-at-home order
Phase Two allows for some outdoor recreation, as well as critical infrastructure work
Phase Three reopens the construction, manufacturing, and real estate industries
Phase Four opens retail and offices (with measures to combat the virus)
Phase Five reopens most businesses and schools with enhanced safety guidelines
Phase Six refers to the regular reopening of all businesses post-pandemic

By early June, Michigan was in Phase Four, with hairdressers, nail salons, and spas open by June 15th. Businesses can continue to reopen with the follow guidelines in place:

Monitor employee symptoms
Maintain social distancing
Require employees and customers to wear masks
Frequently disinfect and clean
Provide PPE to employees

As individual regions of Michigan meet the state’s health and safety criteria, they can continue to progress through these phases. By early July, some regions will open movie theaters and gyms if cases continue to decline.

There are also local county ordinances that may supersede the state guidelines. Be sure to confirm with your local business liaison to identify any specific rules and regulations regarding your business’ reopening.

Community Assistance

The major drawback to government assistance at the state or federal level is that, unfortunately, it can take some time for applications to process and funds to be disbursed. Time is not a luxury that most businesses enjoy at the moment.

Now, more than ever, local communities are being recognized as the most impactful public entities. Neighbors turn to those around them to provide or receive the support necessary to live.

That’s the purpose of Nextdoor.

Nextdoor: The Neighborhood Hub

Nextdoor has become the neighborhood hub by acting as a center for sharing of business recommendations, services, real-time information, and connecting with fellow neighbors in the community.

For many local businesses, Nextdoor provides an opportunity to stay connected with local customers, promote their ongoing business, and receive guidance from local authorities on the most up-to-date information. Nextdoor is an invaluable resource in an unprecedented time.

For those interested in engaging your community in a positive new way, you can set up a Business Page and start connecting with your neighborhood.

Additional sources:

Michigan Economic Development Corporation. Early Stage Funding – Tech Startup Stabilization Fund. https://www.michiganbusiness.org/services/entrepreneurial-opportunity/early-stage-funding/

Michigan Economic Development Corporation. MSF Awardee Relief Initiative. https://www.michiganbusiness.org/about-medc/covid19/msf-awardee-relief-initiative/

PlanetM. Test and develop your technology in Michigan. https://www.planetm.com/test-and-pilot/

Bridge Michigan. ‘Depression-level’ Michigan unemployment tops 1 million from coronavirus. https://www.bridgemi.com/business-watch/depression-level-michigan-unemployment-tops-1-million-coronavirus

WXYZ. 2,977 deaths, 35,291 cases of coronavirus confirmed in Michigan. https://www.wxyz.com/news/coronavirus/2-977-deaths-35-291-cases-of-coronavirus-confirmed-in-michigan

Michigan.gov. Guidance for Business. https://www.michigan.gov/coronavirus/0,9753,7-406-98178_98737---,00.html

Bridge. Michigan now second in nation for jobless claims amid coronavirus pandemic. https://www.bridgemi.com/business-watch/michigan-now-second-nation-jobless-claims-amid-coronavirus-pandemic

U.S. Department of the Treasury. The CARES Act Provides Assistance to Small Businesses. https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

The Guardian. US Lockdown Protestors may have spread virus widely. https://www.theguardian.com/us-news/2020/may/18/lockdown-protests-spread-coronavirus-cellphone-data

Metro Community Development. Business lending. https://www.metrocommunitydevelopment.com/business-lending