Venture North – Find Money For Starting, Expanding, Improving

There’s a new name in town for businesses looking for loans – whether for start-up assistance, gap financing for expansion or funding to improve energy efficiency. Meet Venture North – created from the merger of the Traverse City Area Chamber Foundation and the Traverse Bay Economic Development Corporation (EDC).

This new entity has lofty goals – further reach across the region and building its assets and portfolio through relationships with new funders – to become a higher impact and higher profile organization.

“It just made sense to become one entity with one focused board,” said Executive Director Laura Galbraith, who previously served as senior vice president of finance and administration for the Chamber. Venture North and the Traverse City Area Chamber of Commerce are now sister organizations under the new umbrella organization TraverseCONNECT, led by CEO Doug Luciani.

“Also, with the EDC name, people assumed we were government funded, which we were not,” explained Galbraith. “We are actually the lender.”

Galbraith said the name change better highlights what the organization does and also removes the “Traverse City” to make it clear that it is a more regional effort – even someday possibly expanding outside of the 10-county region.

Venture North  just surpassed the $2 million mark after closing on a $150,000 business loan from its Development Fund in late April for Cherry Republic. The loan was used as gap financing on a $1 million expansion and renovation of Cherry Republic’s retail store at 154 E. Front Street in downtown Traverse City.

Cherry Republic founder and owner Bob Sutherland said financing was the company’s number one roadblock as it worked to expand its business downtown.

Renovations to the downtown Traverse City location include an expansion to some 6,500 square feet of retail space, including a new Grand Café and a bakery. Other financing partners included the Bank of Northern Michigan and Northern Initiatives, based in Marquette.

Another recent recipient is the White On Rice food truck – one of the latest entrants in the exploding food truck market. It first received a $7,500 Sub Micro Fund loan and then later received a $35,000 loan from the United States Department of Agriculture through Venture North.

The organiztion now assists 42 businesses in the Grand Traverse area with expansions, equipment and inventory purchases, working capital and related needs.

Sara Harding, who joined the Chamber Foundation a year ago, is leading the Venture North board in 2015.

“Our mission is to ignite and support entrepreneurship,” said Harding. “I believe that’s how this region will grow. I want to see more of that entrepreneurial energy.”

In addition to the Development Fund, the organization administers four other funds (see graphic) with total assets of more than $5 million, a number Galbraith hopes to grow with the fund’s expanded reach and future partners. Right now those partners include public sources, such as Fifth Third Bank, as well as private and self-funded sources.

The majority of loan recipients come to Venture North by way of area banks or business support programs including SCORE and the Small Business Development Center, explained Galbraith. There is a loan committee, charged with application review and approval, for each of the five funds.

And though the organization has had to turn a few applicants down, it tries not to completely shut the door , Galbraith said. “It may be that they need to go after venture capital, or are over leveraged or just need some business counseling,” she said.

It’s also worthy to note the organization hasn’t had any major problems with loan defaults.

“We can be flexible,” Galbraith added, working with customers on adjusting monthly payments if they run into a cash flow issue.

The goal is to keep the loans affordable with the price based on risk, said Galbraith, adding that some companies use the loan programs so they are “more bankable” in the future.

 

More “Alternative” Funders

The lending landscape continues to evolve as more alternatives to traditional financial institutions are created to meet the demand of entrepreneurs and small business owners who need other avenues for financing – whether to get their start-ups off and running, cover a gap in financing, or to take their company to the next level. A few more local organizations are highlighted below:

Northern Initiatives (northerninitiatives.org): A Community Development Financial Institution (CFI) that provides loans to small businesses and entrepreneurs who may not qualify for a loan at a traditional bank.

Past local loan recipients: Cherry Republic, Redheads Cafe and Tasting Room, WaterFire Vineyards

Contact: Chris Wendel, 231.409.7889 or cwendel@northerninitiatives.org

Northern Michigan Angels (northernmichiganangels.com): A group of investors looking for both investment opportunities while at the same time helping to grow the region’s economic base through the rapid growth of early-stage companies.

Past local investments: Altus Brands and Silikids

Contact: Deanna Cannon, executive director, deanna.cannon7@gmail.com

Common Cents Capital: A new group of approximately a dozen area investors pooling money to provide loans to small businesses. Members also part of As Local As Possible, a citizens group interested in the local economy.

Past local investments: None so far; approximately $30,000 available

Contact: AsLocalAsPossible.com

 

There are also several business support organizations that can point individuals in the right direction for their best chance at financing, including the Michigan Small Business Development Center (SBDC Northwest Region) and SCORE.

 

 

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