Fremont Area Community Foundation wants to help preserve the existing businesses in our community and give them the tools to not only survive but to thrive as our state carefully reopens and businesses once again generate income.

That’s why the Community Foundation created the Small Business Recovery Loan Program to provide support to small businesses in the wake of the COVID-19 pandemic. The Community Foundation will partner with Michigan State University Federal Credit Union (MSUFCU) to offer low-interest loans with favorable terms.

WHO
Self-employed individuals and small businesses (both for-profit and nonprofit) with fewer than 50 employees

WHAT
Loans from $5,000 to $50,000 are available for Newaygo County businesses with fewer than 50 full-time employees. The terms of the loans are favorable with a low interest rate and up to a five-year term. The first principal and interest payments may not be due until 90 days after closing, depending on the needs of the business. Both nonprofit and for-profit entities are eligible to apply, including service, retail, agriculture, commercial, and industrial businesses.

WHERE
Businesses must be located in Newaygo County to apply

HOW
The Community Foundation is partnering with MSU Federal Credit Union, a Michigan-based organization with a shared commitment to our community. All loan documentation will come from MSUFCU.

Request assistance

If you or your business are interested in applying for a loan from the Small Business Recovery Loan Program, please start by reaching out to Dan Wheat or Don Farmer at loan@facommunityfoundation.org or the additional contact information below.

Dan Wheat, FACF community investment officer
dwheat@facommunityfoundation.org
231.766.1210

Don Farmer, independent consultant retained by FACF
farmer.d.w.@comcast.net
231.928.9155

Fremont Area Community Foundation recently announced a partnership with MSU Federal Credit Union (MSUFCU) to create the Small Business Recovery Loan Program. Up to $3.4 million is being leveraged by the Community Foundation with MSUFCU to support businesses in Newaygo County. An additional $100,000 was invested in Northern Initiatives to provide small business loans. Northern Initiatives is a community development financial institution (CDFI) that provides loans and business expertise for start-up and existing businesses that might not otherwise qualify for loans from traditional financial institutions.

The loan program at MSUFCU is designed to assist small businesses negatively impacted by the COVID-19 pandemic and subsequent state shutdown. During the stay at home order, many businesses were temporarily closed, resulting in lost income, staff layoffs, and ongoing fixed costs that created financial drain. The loans are meant to serve as short-term funding to help local businesses get back on their feet.

“We know that many local businesses applied for federal aid in the past several months. While most received a small amount of recovery funding, many were denied or not even allowed to apply,” said Carla Roberts, President and CEO. “The Community Foundation wants to preserve the existing businesses in our community and give them the tools to not only survive but to thrive as our state slowly reopens and businesses once again generate income.”

Loans from $5,000 to $50,000 are available for Newaygo County businesses with 50 or fewer full-time employees. The terms of the loans are favorable with a low interest rate and up to a five-year term. The first principal and interest payments may not be due until 90 days after closing, depending on the needs of the business. Both nonprofit and for-profit entities are eligible to apply, including service, retail, agriculture, commercial, and industrial businesses.

“In essence, we are standing behind the small business community and using the Community Foundation’s assets as a kind of collective bargaining chip to leverage the support we believe local businesses will need during this recovery,” said Roberts.

In reviewing the program for compliance, Jeff Hert, CPA, principal at Rehmann Robson said, “This is a terrific program for businesses in the community and shows excellent collaboration with a partner. This is a great example of impact investment in a crisis situation for small businesses.”

Both the Community Foundation and MSUFCU believe their partnership is a natural fit and demonstrates the organizations’ shared missions to serve and improve life in the community.

“MSUFCU is pleased to partner with Fremont Area Community Foundation to provide local businesses with a newly-created loan program,” said April Clobes, President and CEO of MSUFCU. “It is all of our responsibility to lift up our businesses and communities in times of need so that everyone has the opportunity to thrive.”

Businesses interested in applying for a loan from the Small Business Recovery Loan Program can visit facommunityfoundation.org/loans for more information. Program contacts Don Farmer and Dan Wheat can also be reached directly at loan@facommunityfoundation.org.

We were all saddened this month by the loss of one of our own. Bill Leaver graced the Community Foundation with kindness, quiet wisdom, and three years of faithful service on our Board of Trustees. He also served on our committees for investment and community and economic development. Bill passed away at home on May 16, surrounded by his family, following a journey with cancer.

Bill represented the classic Newaygo County comeback story. He and his wife Jeanne both grew up here. They even dated in high school, reconnected years later at a reunion, and married in 1996. Their family now includes five children, nine grandchildren, and one great grandchild. While Bill’s education and career took him around the country, he and Jeanne always knew they wanted to return to this community. Bill attended Western Michigan University followed by graduate school at the University of Michigan. His 40-year career in hospital administration honed his executive leadership skills, which he contributed to our Community Foundation starting in 2017.

In addition to his role on our board, Bill was a thoughtful donor. He and Jeanne established a fund at the Community Foundation after giving for several years in response to needs that came to their attention. Supporting women in transition and addressing homelessness were especially close to their hearts. “We both grew up in an environment where our parents were very focused on teaching you that you were blessed with many gifts and you have a responsibility to help,” said Bill in a 2016 interview. “It’s not something I have to think about a lot. I’ve grown up with it as part of my value system. We need to be more concerned with what kind of society we have and the world our grandchildren will live in. It’s not just the responsibility of the government, schools, or churches. It’s all of us.”

Bill’s leadership in volunteering his time, donating funds, and his passion for helping those in need was truly inspiring. We will sorely miss his vision, enthusiasm, and determination to support his neighbors and make his community better.

The Leaver family has recommended that memorial gifts be directed to the William and Jeanne Leaver Fund at the Community Foundation. Friends may also share memories and condolences online at www.crandellfh.com.

An interview with Carla Roberts

Fremont Area Community Foundation is perhaps most well-known for its grantmaking programs and supporting local nonprofit organizations. Supporting economic development, small business growth, and entrepreneurship has also been a longstanding focus for the organization but often looks different from traditional grantmaking due to a variety of restrictions that all community foundations must navigate.

With all sectors feeling the impact of COVID-19, Carla Roberts, president and CEO, offered some insight into the Community Foundation’s pandemic response and its continuing commitment to local businesses.

How does supporting local businesses fit within the mission of the Community Foundation?

We believe small businesses are the backbone of our local economy. We love our business community, buy local whenever we can, and we encourage our grantees to do the same. This support for small business and entrepreneurs goes back to our earliest days. Several people have told us over the years that they got their start because Bessie Slautterback, the organization’s first executive, gave them a $5,000 loan to start a business.

Of course, we live in different times now, with significant IRS restrictions on how a community foundation can engage with local businesses. We can only award grants to organizations with a charitable status, such as 501c3 nonprofit organizations. That is why we work through intermediaries—such as Northern Initiatives and The Right Place—that have a charitable status and mission to support local business. The Right Place is a service organization and vital partner to support manufacturing, agricultural businesses, tourism, and entrepreneurship in Newaygo County. Northern Initiatives is a community development financial institution (CDFI) with the capability to provide financial services to businesses that do not qualify for conventional loans. In 2015, we established a $250,000 loan pool with Northern Initiatives to ensure that local businesses have the working capital to build and sustain their businesses.

The COVID-19 crisis has obviously had a large impact on our entire region, including local businesses. How did the Community Foundation initially respond to the need and what were the considerations for supporting the business community?

When the crisis hit, we were inundated by the needs from all sectors. We had to quickly deploy our staff in new ways, setting most up to work remotely. Within one week we had created the Community Response Fund and a new quick-response grant application and process to deploy grants from the fund. Of necessity, our first priority was to distribute emergency relief funds for food, shelter, and basic needs as demand quickly escalated alongside job losses.

At the same time, we knew small businesses and entrepreneurs were hurting and began to explore possibilities for supporting them in new ways. We encouraged nonprofits and businesses to take advantage of state and federal programs and we set up a technical assistance team of local experts to provide guidance to navigate those resources. The team included Dan Wheat to work with nonprofits,  Don Farmer to work with businesses of 50 employees or fewer, and Julie Burrell to work with larger businesses. Those resources are still in place for anyone who needs assistance. More information can be found at bit.ly/FACF-business.

We also began to develop a strategy to help small businesses by leveraging Community Foundation assets to support low-interest loans. It took some time to find a partner—as many local banking partners are inundated with processing federal programs—but we are very close to announcing a program to assist local businesses as we enter our county’s intermediate recovery phase.

Why wasn’t the Community Foundation able to award immediate needs grants or use other parts of its endowment to directly support small businesses?

The primary reason is that it is difficult to establish a “charitable class” which is required by the IRS. But even without those restrictions, we would not have had the available dollars in our grantmaking budget. While the Community Foundation and its affiliates award nearly $9 million in grants each year, our trustees only direct about $5 million of that amount. The other grant funds are designated for specific areas or are otherwise restricted in their use. We estimated that the need in the small business community would likely reach $2-3 million. Since we had already deferred significant resources to immediate basic needs such as food assistance, there were simply not sufficient grant funds to address the emerging needs anticipated during the recovery period for both the nonprofit and for-profit sectors.

Making grants to small businesses from our endowed assets would not only conflict with IRS funding restrictions but would also endanger the long-term power of our endowment. Our trustees have the responsibility to ensure that the endowment remains intact and keeps pace with inflation. To ensure this, we have a spending policy to limit the dollar amounts expended on an annual basis for both grants and operations. Along with stock market fluctuations, tapping into the endowment could impact and reduce our grantmaking abilities for years to come. Our community will need us well beyond the immediate crisis and we need to ensure the Community Foundation is viable for the recovery period and beyond.

Endowment ensures we will be here for the community for good, forever. A great example of the power of endowment is the Harry Williams Fund that was started during the Great Depression. That $5,000 fund has grown to over $9 million in assets and has given out more than $9 million over the life of the fund. Those were troubled times and it would have been easy to spend the funds for immediate needs, but the donor chose to endow them to provide for the present and the future.

What are your next steps for supporting the business community?

We are putting in place some financial programs through intermediaries that will offer low-interest loans on very favorable terms. In essence, we are standing behind the small business community and using the Community Foundation’s assets as a kind of collective bargaining chip to leverage the support we believe local businesses will need—not just for the intermediate recovery period but probably for much longer. We will be announcing details about this program as soon as they are finalized. Stay tuned!