Michigan Small Business Loans

When existing businesses face difficulty with cash flow, a loan might be a good idea. Whether it’s an influx of capital to buy equipment or to pay salaries and wages, it’s great to have some extra cash.

At a glance  After the 2008 economic crisis, Michigan recovered quickly enough and now has almost 900,000 small businesses, which make up 90% of Michigan’s economy. Michigan small business loans are generally widely available. Yet, they are predominantly government-issued. On this page, our experts reveal the top small business loans in Michigan.

Top 6 Small Business Loan Options in Michigan

Interest Rates

Credit Check

Loan Amounts

Detroit Community Loan Fund

7% flat rate

Aimed at people who haven’t had access to credit


Chemical Bank

Depends on the credit score


Varies according to the type of loan

Opportunity Resource Fund

Depends on the credit score


Varies according to the type of loan

P2 Loans

5% flat rate


Up to $400,000

Invest Detroit

Not specified



Michigan First Credit Union

Competitive rates


Varies according to the type of loan

Best Michigan Small Business Loans Explained 

1. Detroit Community Loan Fund

The Detroit Community Loan Fund is explicitly aimed at small business owners who historically have not had access to capital and loans. The fund seeks to provide loans to women and minorities, groups most financial aid institutions have continually overlooked. 

To access this fund, you’ll have to pay a $100 application fee, and you can ask for anything between $5,000 and $50,000. You can pay the loan back at a flat 7% rate, and you have an option to pay back only interest during the loan term and pay the principal back at the end. 

The fund doesn’t place many restrictions on what you can use the money for. You can use it for working capital, equipment, business expansion, purchasing materials, supplies, or property improvements. The most significant restriction is that you can’t purchase real estate with the Detroit Community Loan Fund. 

2. Chemical Bank

Chemical Bank is a top provider of Small Business Administration loans (SBA), guaranteed by the U.S government. These loans offer low interest rates on large loan amounts. You also get long repayment periods. In 2018, Chemical Bank issued a total of $57 million in SBA loans. Since these loans come with a government guarantee, the bank is more willing to provide an SBA loan to small business owners who wouldn’t otherwise qualify. 

If you’re not interested in an SBA loan, Chemical Bank also offers various other loans and lines of credit to small business owners. 

To qualify for a loan from Chemical Bank, you’ll have to have a strong credit record and a proven revenue record. A bank loan is not for companies that require working capital but rather for a business looking to expand. In other words, these loans are more applicable to established enterprises rather than start-ups. 

3. Opportunity Resource Fund

For start-ups, the Opportunity Resource Fund is a great option. It also provides working capital loans to existing businesses. You may be wondering, “How to get a small business loan in Michigan through the Opportunity Resource Fund?” Well, you have to meet specific requirements. Your company has to work towards a social goal, like employing unemployed individuals or training at-risk youth. You’ll have to submit a complete business plan with your application and down payment for the loan.  

For loans under $150,000, you have to provide a 10% down payment, while for loans above $150,000, the fund requires a down payment of 15%. Additionally, you also have to provide a guarantee. This can be in the form of real estate, inventory, or other assets. In individual cases, the fund has also accepted personal guarantees.  

4. P2 Loans

The Michigan Department of Environment, Great Lakes, and Energy (EGLE) provide Pollution Prevention (P2) loans to small businesses. You can apply for a P2 loan if your small business works towards sustainability. If you’re engaging in energy conservation or waste reduction, your business could qualify for a loan. 

To be eligible for a P2 loan, your business has to be independent and not part of a franchise or chain. You can’t have more than 500 full-time employees, and the business shouldn’t be a dominant entity in your industry. While you can run a for-profit business, you have to be involved in projects regarding waste reduction, sustainability, or energy conservation. 

The P2 will grant loans up to $400,000 with a 5% interest rate. The government provides half of the funding, while private lenders offer the other half. 

5. Invest Detroit

As part of initiatives to expedite Detroit’s economic growth, Invest Detroit was formed by several philanthropic and local organizations to provide loans to small businesses. It targets those that don’t qualify for traditional business loans. Your business can receive a capital influx between $50,000 and $2.5 million. 

Invest Detroit offers assistance with writing business plans, mentorship programs, and technical training in various areas. You can also apply for equity financing from Invest Detroit’s venture capital arm.  

6. Michigan First Credit Union

A credit union is often a good place to apply for financing. These institutions work on a members-only basis but are usually more community-orientated than banks. Since credit unions are non-profit organizations, their interest rates are generally much lower than traditional banks. If you don’t have a good credit record, low revenues, or other aspects that conventional financial institutions look for, a credit union could still grant a loan. 

If you live or work in the state of Michigan, you can qualify for a loan from the Michigan Credit Union. You can apply for SBA loans, conventional term loans, or U.S. Department of Agriculture-backed loans. You can contact any Michigan Credit Union branch to apply for a small business loan.

Top Online Michigan Small Business Loan Options

Besides the best Michigan small business loan options, you should also consider looking into a nationally available online loan. These loans are easily accessible. 

1. Kabbage

Kabbage was one of the first lenders to provide loans to businesses that didn’t have a credit record. It has a good reputation, not only for speedy access to funds but also for ease of use. If you have a bad credit history, you can still qualify for a loan. Loans start at a minimum of $5,000 with repayment periods as short as six months, which allows you to pay off debt quickly. 

The application process is also quick and easy, with small business owners applying for loans online. Another advantage of Kabbage’s model is that it allows you to borrow the money you need and not overcommit to unnecessary credit. 

Unfortunately, you’re going to pay, though, since Kabbage has some of the highest interest rates on the market. This is understandable because it takes on high-risk clients. The repayment structure is also complicated, and it can be hard to figure out exactly how much you need to put aside to meet the repayments. The staff is available seven days a week to help with any questions. 

2. BlueVine 

If you’re looking for more competitive interest rates, you can consider BlueVine for your loan needs. When you get a loan from BlueVine, you can access the money within a few days. You can contact personal customer support with ease, even though it’s online-based. The starting price for loans is $10,000. 

BlueVine isn’t available in every state, so you should check for availability in Michigan before you fill in the application forms. You have to repay the loan in six to 12 months, and the repayment amounts can be very high. Another disadvantage is that you have to make repayments weekly rather than monthly, negatively impacting your cash flow.

If your turnover is less than $10,000 a month, or you haven’t been in business for more than six months, you won’t qualify for a loan with BlueVine. You also need to have a good credit score, with a minimum of 600. 

3. Square Capital 

If you’re looking for access to start-up capital, Square Capital is a good option. With starting costs as low as $500, you can follow the easy application process to access funds quickly. Square Capital doesn’t have any prepayment fees, making the repayment of the loans much more manageable. There are also no late payment fees, and the repayment of the loans is fully automated and linked to your point of sale system. 

Square Capital has high annual percentage rates because the term is shorter than traditional business loans. 

Additional Michigan Small Business Financial Resources 

Some states provide financial assistance to small businesses. You can access Michigan small business grants from a few sources.

Michigan Business Development Program

If your small business creates 25 jobs, you can apply for a Michigan small business grant from the Michigan Business Development Program. These grants do not work the same as loans since you don’t have to pay the money back. You can contact the Michigan Business Development Program directly to get more information and application forms. 

Accelerate Michigan Innovation Competition

An Invest Detroit initiative, Accelerate Michigan, allows entrepreneurs to showcase their business ideas in front of investors. If you have a tech start-up or a high-growth company, you can compete for your share of $1 million. 

Motor City Restore

If you’re looking to expand your business premises, you can have plans drawn up by an architect or engineer. The Motor City Restore fund will offset some of the costs of the renovations with a grant. 

How to Prepare for a Michigan Small Business Loan

Some business loans don’t have many requirements, but the more traditional operators look at your credit record before granting you a loan. Here are some things you can do in preparation for a loan application to ensure that you’ll get a reasonable interest rate:

  • Ensure you have a good credit score.
  • Register your business as a Limited Liability Corporation.
  • Increase your business revenues.
  • Ensure you have an in-depth business plan.
  • Open a bank account for your business.

The Bottom Line

Whether you’re a start-up or have been in business for a while, these various loans and grants can help grow your business. Choose a loan that has clear terms and an affordable payment plan. It’s a good idea to take advantage of the grants that Michigan offers to small businesses.