Key Terms
- Most small business loans can have 5-to-10-year terms, but some are longer, providing a more affordable monthly payment for borrowers that fits within their financial goals.
- If you do not have a business credit history established, the owner’s personal credit score could be a factor in determining if the borrower qualifies.
- The lowest rates for small business loans often come from those who have a strong credit history, a number of years in the business, and a profitable company.
Michigan’s location on Lake Michigan in the Great Lakes region of the country has played a strong role in its development and growth. The state is home to 10.12 million people, making it one of the top 10 states in terms of population. Its capital is in Lansing, though other large cities include Detroit, Glen Arbor, Grand Rapids, Ann Arbor, Warren, and Sterling Heights. It is a diverse state known for its unique culture and well-established industries. Michigan’s history includes playing a significant role in the Industrial Revolution thanks to the automotive plants and steel plants located here. Today, Michigan is far more diverse in terms of its economy and industries. It remains one of the best places in the country to start a business.
Some of the largest industries present in Michigan include manufacturing, forestry, services, high-tech, and agriculture. There is a strong tourism market in the state, especially along the lakefront and ports. The area also has a strong healthcare industry. When it comes to businesses, there are a number of large corporations here, but there is also a large population of small businesses. The U.S. Small Business Administration states there are 911,914 small businesses operating in the state. Those companies provide jobs for 1.9 million, nearly 20% of the state’s workforce. They contribute a payroll of $85,416,571. There are many households that are dependent on these companies.
Starting and running a small business is not simplistic, and it takes a significant amount of capital. It is not uncommon for Michigan small business lenders to offer a range of affordable loans to business owners here. The latest three years of data from from the Small Business Administration indicates there are 5,991 active small business loans in place in Michigan. That is $2,774,305,704 worth of value, with the average loan being $463,079. The funds from these loans are often beneficial to helping companies to grow, expand their operations, add new products or services, or to help them to add more jobs.
How small business loans work in Michigan
A small business loan is a type of financing offer from a lender to a company that typically has under 100 employees. Some of these loans can be based on collateral, though not all are. Michigan small business lenders often provide companies with access to these funds for a wide range of goals and needs, such as supporting the purchase of new equipment, helping to pay for new marketing campaigns and branding, or supporting the company’s expansion. Like any other loan, borrowers are required to repay the loan to the lender with interest. The amount of interest and the overall availability of these loans depends on a variety of factors.
There are many reasons to choose small business lenders in Michigan for financial help like this. For companies that qualify, the loans can provide a competitive loan term and interest rate while also providing access to large infusions of cash to help with numerous needs companies have. Depending on the type of loan, there are often flexible loan terms, such as loans that are longer than 10 years and those that have unique repayment plans. Many do not require collateral.
Michigan small business loan lenders will set specific terms in place for borrowers. Most of the time, lenders need as much information as possible about the company to determine if the loan is justified and a safe risk. This includes revenue information, including insight into the company’s industry, competitors, and products and services. It may also be necessary to have access to a strong credit score. That may be the company’s established credit history as well as the owner’s credit history.
Interest rates on these loans vary based on the type of loan, lender, and the overall qualifications of the business. Small business lenders in Michigan are often very flexible in offering loans that meet the unique needs of a company. Some of the Michigan small business loans available include the following:
- Bank loan
- SBA loan (info available at sba.gov)
- Business term loan
- Business line of credit
- Equipment financing
As a company, it is a good idea to learn as much as you can about the lender as well as the offers that your company may qualify for based on how much you wish to borrow, repayment terms, the application process, and affordability. Most loans will not require a down payment, unlike buying a home. Instead, you can get short-term support for your business needs rolled into the loan so you can get business relief quickly without worrying about a down payment. Business financing resources may also be available through local grant programs, the Michigan Economic Development Corporation, or regional business loan funds.
In the state of Michigan, after you’ve crossed the hurdle of coming up with start-up funds, you might need support to scale. Plenty of Michigan business owners seek out loan applications from banks, credit unions, and even the federal government. Entrepreneurs who know they have a solid concept and a means for repayment can benefit from the cash infusion available through a loan, so long as the business owner understands key eligibility issues.
10 Biggest small business loan lenders in Michigan
Michigan small business loan lenders ranked by loans issued in the state.
| Rank | Bank Name | # of Michigan Loans | Avergage Interest Rate | Average Loan Size |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 1118 | 5.43% | $206,411 |
| 2 | The State Bank | 98 | 4.60% | $901,132 |
| 3 | Comerica Bank | 54 | 4.76% | $414,507 |
| 4 | Newtek Small Business Finance | 41 | 6.00% | $869,941 |
| 5 | Oxford Bank | 39 | 5.29% | $458,387 |
| 6 | Live Oak Banking Company | 37 | 5.28% | $1,770,632 |
| 7 | Nicolet National Bank | 35 | 5.29% | $800,766 |
| 8 | United Midwest Savings Bank | 30 | 5.96% | $281,433 |
| 9 | First Internet Bank of Indiana | 22 | 5.72% | $1,373,327 |
| 10 | Old National Bank | 21 | 4.43% | $1,066,509 |
1. Huntington National Bank
Founded in 1866 and based out of Columbus, Ohio, with branches in 11 states and $179 billion in assets to meet its customers’ needs, The Huntington National Bank has much to offer. Huntington National Bank has a number of products and services to meet personal and business banking needs.
We reached out to Huntington National Bank to see if there were any advantages to working with them during the SBA loan process. Here is what they told us:
- SBA Preferred Lender
- Offers the SBA 7(A) Loan Program, SBA 504 Loan Program and SBA Express.
- Loans can be used for working capital, business acquisition, equipment purchases or other purposes.
When you’re ready to connect with an experienced SBA loan officer, use our form to quickly match with SBA loan programs based on your specific circumstances.
2. The State Bank
The State Bank in Michigan was founded in 1898 to meet the needs of the Fenton community for banking. Now operating with 20 branch locations and in 8 counties, The State Bank is able to reach even more members and communities for their personal and business banking and loan needs.
We reached out to The State Bank to see if there were any advantages to working with them during the SBA loan process. Here is what they told us:
- Preferred SBA LEnder
- Offers the SBA 7(A) Loan Program and SBA 504 Loan Program.
- Loans can be used for working capital, business acquisition, equipment purchases or other purposes.
When you’re ready to connect with an experienced SBA loan officer, use our form to quickly match with SBA loan programs based on your specific circumstances.
3. Comerica Bank
Comerica Bank has been providing banking services to customers for over 170 years. With a wide variety of products and services to meet its customer needs, Comerica Bank can provide tools such as small business loans, commercial banking, wealth management, and business and personal banking options.
We reached out to Comerica Bank to see if there were any advantages to working with them during the SBA loan process. Here is what they told us:
- SBA Preferred Lender
- SBA Express lines of credit or term loan available up to $350,000
- Offers other business lending products like lines of credit and term loans
When you’re ready to connect with an experienced SBA loan officer, use our form to quickly match with SBA loan programs based on your specific circumstances.
4. Newtek
Newtek offers a number of services for businesses to help them to meet their financial needs. Products such as loans, cloud solutions, IT security, payment processing, payroll, and options when it comes to disaster recovery are available to protect and help a business to thrive and grow.
We reached out to Newtek to see if there were any advantages to working with them during the SBA loan process. Here is what they told us:
- Offers the SBA 7(A) Loan Program and SBA 504 Loan Program.
- One of the nation’s largest non-bank government guaranteed lender.
- Loans can be used for working capital, business acquisition, equipment purchases or other purposes.
When you’re ready to connect with an experienced SBA loan officer, use our form to quickly match with SBA loan programs based on your specific circumstances.
5. Oxford Bank
With 14 locations providing a number of banking services in eastern Michigan, Oxford Bank is able to meet the needs of its customers by offering a number of products. Products from Oxford Bank include small business loans, business and personal banking products, credit cards, mortgages, and commercial real estate loans.
We reached out to Oxford Bank to see if there were any advantages to working with them during the SBA loan process. Here is what they told us:
- Local processing
- Offers the SBA 7(A) Loan Program and SBA 504 Loan Program.
- Loans can be used for working capital, business acquisition, equipment purchases or other purposes.
When you’re ready to connect with an experienced SBA loan officer, use our form to quickly match with SBA loan programs based on your specific circumstances.
Other resources for small businesses in Michigan
Gaining access to loans is important for most Michigan small business owners. Yet, it is also helpful to have advice and guidance in starting, growing, and expanding a business. There are a few resources that can help to make that possible.
One of the first tools to turn to is the Small Business Administration in Michigan. Their website is packed with information, and companies can get various types of training and program access as well. This can help a business tackle challenging tasks such as building business credit or protecting against cyber threats. There’s a range of resources available on the organization’s website.
Consider the benefits that SCORE offers as well. This organization connects experienced, successful business owners with companies that are newer and growing. It is possible to find a mentor to work with within your local area. The organization has a local office in Ferndale, but lots of tools online to use as well. Best of all, there is no cost to using any of these services.
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Joshua Holt is a lawyer and founder of Biglaw Investor. He spent 10 years practicing private equity mergers & acquisition law for one of the largest law firms in the country. As part of his practice, he advised small and medium sized businesses on matters ranging from business loans to the acquisitions and divestitures of stocks and assets.
