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Invest Detroit
600 Renaissance Center, Suite 1710
Detroit, MI 48243
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Your Financing Needs
Managed Funds
Your Financing Needs
Invest Detroit provides the following types of financing to support community and economic development in the City of Detroit.
Predevelopment
Predevelopment financing assists both individual developers and community organizations by providing funding for costs incurred in the early stages of a project, such as environmental studies or appraisals that facilitate the project's pursuit of traditional financing. Predevelopment loans may be utilized for commercial, residential and mixed-use development projects in targeted areas of Detroit.
Transaction Range
$50,000-$250,000
Projects Considered
Housing Development Projects Including Multi-Family and Mixed-Use Developments; Commercial Projects That Have Potential for Significant Positive Impact on the Community
Intended Use
The targeted area for the Predevelopment loans is Detroit's Woodward corridor, a 7.2 square mile area. For nonprofit and community development projects, the entire City of Detroit may be eligible. Land Acquisition; Environmental Reports; Legal Work; Tax Credit Consultants and Fees; Site Planning and Design; Appraisals; Survey Work; Construction Required to Preserve the Structural Integrity of a Building
General Loan Criteria
Description of the project, including location, whether it is new construction or rehabilitation, year built, total square footage, number and square footage of housing units created, project ownership, and key project members; Detailed project budget that outlines all sources and uses and loan amount requested, including amount and source of owners' equity investment, detailed itemization of professional fees and other expenses, total construction hard costs, total construction soft costs, etc.
Emerging Business
Emerging and start-up service, product, and device and technology businesses led by management teams that have relevant experience and that have successfully completed a training program through a qualified regional business incubator/accelerator will have access to micro-loans. The loan recipients will receive business to business introductions and business mentoring from individuals with senior level expertise. Additionally, a network of sponsors and partners will assist in fostering demand and creating opportunities for companies that have received micro-loans through this program. Loan applications must be submitted by a qualified business incubator/accelerator representing the company as its sponsor.
Transaction Range
$10,000-$50,000
Intended Purpose
Loans are considered to assist entrepreneurs in the start-up or scale-up of their businesses for the purpose of: Equipment; Inventory; Limited Tenant Improvements; Corporate Formation and Legal Issues
Financing Types
Loans are meant to position the company for growth and to meet the criteria necessary to qualify for the next level of financing. Senior Term Loans; Subordinated Term Loans (balloon); Working Capital Lines of Credit; Convertible Notes with Warrants
General Loan Criteria
Borrower(s) must provide a written business plan that is sponsored and submitted by a qualified business incubator/accelerator to the First Step Fund. Requested information includes financial projections for the business being financed which demonstrates the viability of the business with detailed budgets and demonstrated repayment capacity. Plans must also include detailed marketing, financial and operations plans; Borrower(s) must have a personal investment in the project (adequacy to be determined by the Investment Committee); Completion of predevelopment/start-up work and project timeline (milestones).
Qualified Sponsors' Training Programs
TechTown SmartStart
TechTown's SmartStart program clients work closely with TechTown staff, and an array of business consultants and service providers to create and execute a detailed strategy for growth.
TechTown FastTrac
TechTown FastTrac program, in partnership with the Kauffman Foundation, provides services for entrepreneurs that range from business conception to growth and acceleration.
SPARK Entrepreneur Boot Camp
Ann Arbor SPARK Entrepreneur Boot Camp program is two intensive days of learning that compresses the usual three-month learning curve to move a business to the next level.
TechTown and SPARK Business Accelerators
TechTown and SPARK Business Accelerators speed up the development of start-ups in the region with a variety of valuable services designed to shorten the time required to attract capital, customers, or other resources.
TechTown and SPARK Regional Incubator Networks
TechTown and SPARK both have Regional Incubator Networks which are one of the many vital components in the business acceleration process. Both incubators provide physical space, essential services and business development guidance &ndash at lease rates that are affordable for start-up companies.
TechTown and SPARK Wet Lab Incubators
TechTown and SPARK Wet Lab Incubators boast state-of-the-art life science and biotech research space in a collaborative entrepreneurial environment with established tenant interaction and support.
High-Growth Companies
Detroit Innovate is a seed stage investment fund that fuels the formation and development of high-growth companies in the Detroit Region. The Fund assists emerging companies commercializing enabling technologies in the healthcare, transportation, advanced manufacturing and resource efficiency sectors. Detroit Innovate is focused on high-growth companies and operates as an early stage venture capital fund, investing through priced equity rounds and convertible notes with warrants/discounts.
Investment Size
Detroit Innovate will make initial investments in early stage, high-growth companies of $50,000 - $500,000 with considered follow-on investments up to a maximum of $1.5 Million for qualifying companies.
Focus
Detroit Innovate is focused on scalable technology-based companies in healthcare, transportation, advanced manufacturing and resource efficiency.
Target Area
Southeast Michigan with special concentration in the City of Detroit
Business & Equipment
Financing from business & equipment loans may be utilized for the growth of commercial and industrial businesses in the City of Detroit.
Transaction Range
$500,000-$2.5 million
Industries Serviced
Manufacturing Companies; Distribution and Logistics Companies; Service Companies; Others
Intended Use
Business Expansion; Capital Improvements; Purchase of Equipment; Purchase of Real Property; Working Capital; Restructuring of Existing Debt
Financing Types
Loans of this type will typically be subordinated and are intended to assist the company / borrower in meeting the financing requirements of a traditional lender. Financing types considered are: Term Loans; Mezzanine Financing; Bridge Loans; Construction Loans; Commercial Mortgage Real Estate Loans
General Loan Criteria
A business plan which demonstrates that the future financial results of the company will service the senior and capital debt; The business must have experienced and successful management with three years of successful operating experience.
Real Estate
Real estate financing may be utilized to support the development of commercial residential and mixed-use projects. Loans to experienced developers of residential real estate and neighborhood retail centers will be considered.
Transaction Range
$500,000-$2.5 million
Intended Purpose
Construction of Apartments, Lofts/Condos and Single Family Home Developments; Financing for Commercial Residential Rental Properties and Retail Centers; Bridging Tax Credit Equity; Purchase of Real Property Intended for Immediate Development
Financing Types
Loans of this type are intended to assist the developer in meeting the requirements of traditional lenders and are typically subordinate to the senior lender, but will not exceed 50% of the equity required for the project. Financing types considered are: Bridge Loans to Facilitate the Timing Gap of Monetizing Tax Credits; Construction Loans; Term Loans (up to 7 years)
General Loan Criteria
The borrower (developer) must provide financial projections for the project which demonstrate its viability along with detailed budgets and demonstrated repayment capacity; The developer/developers must provide three years of financial statements and sufficient information to evaluate the developer's cash flow and debt service capacity; Real estate loans require an equity contribution by the borrower/developer;
Neighborhood Retail
Neighborhood retail loans are available to small retail businesses that service neighborhoods in the Greater Downtown, a 7.2 square mile area which includes Corktown, Downtown, Eastern Market, Midtown, New Center and the Riverfront.
Transaction Range
$50,000$500,000
Industries Serviced
Retailers; Service Industries
Intended Use
Loans of this type are not intended to replace conventional bank and small business financing but to supplement it and to provide financing when alternatives are not available. Acquisition financing of investor-owned real estate is not eligible for consideration under the program. Loans are considered for the purpose of: Start Up Capital; Purchase of Equipment; Tenant Improvements
General Loan Criteria
A business plan that includes description of the business (including retail type), ownership, key managers and location, and marketing plan and assumptions; Applicants must contribute meaningful owners' equity in their projects and demonstrate a successful track record
Detroit Investment Fund
The Detroit Investment Fund (DIF) is a source of private sector financing designed to be a catalyst for investment in Detroit by financing qualified commercial projects and entities to stimulate economic development and job creation. The DIF provides gap financing intended to leverage owner equity so that the transaction merits traditional bank/senior lender financing. Investments in strategic projects are considered when potential exists for a significant long-term, clear benefit to the economic development of Detroit that would likely not be completed without the DIF.
Loan Size
$500,000$2.5 million
Target Area
The City of Detroit
Eligible Projects
Business Expansion; Capital Improvements; Purchase of Equipment; Working Capital; Purchase of Real Property; Commercial Real Estate Development; Strategic Investments that Create a Long-Term Benefit for the Community
Advantages Over Other Funding Sources
Flexibility to tailor the structure of a financing package to meet customer needs; Ability to leverage owner equity to merit traditional financing; Access to senior level expertise in a variety of industries
General Loan Criteria
Sponsors with a proven track record and personal investment in the project; Clear exit strategy for the Fund with expected repayment within 5-7 years; Significant economic impact in the City of Detroit
Core City Strategic Fund
The Core City Strategic Fund (CCSF) is a revolving loan fund that supports priority commercial real estate projects in the Greater Downtown area. CCSF projects are identified through the collaborative efforts of Invest Detroit, Downtown Detroit Partnership, Detroit Economic Growth Corporation, and Midtown Detroit, Inc. These projects are aligned with the priorities of the M-1 Transit Oriented Development Strategy and Detroit Future City Framework.
Purpose
To stimulate economic growth by supporting commercial, residential and neighborhood development through loans for strategic projects which will serve as a vital catalyst to link neighborhoods, create jobs, assist efforts for sustainability and create a dense, exciting and vibrant community in Greater Downtown Detroit.
Target Area
Greater Downtown Detroit, a 7.2 square mile area, which includes Downtown, the Central Business District, Midtown, New Center, Corktown, Eastern Market, Lafayette Park, Riverfront and Woodbridge.
Loan Size
Loans range from $500,000 to $2.5 million with a preferred range of $750,000 to $1.5 million.
Loan Terms
CCSF generally provides fixed amount term loans with flexible structure and repayment. Typical maturity is five to seven years.
Collateral
Real estate mortgage on the property and guarantees of the principals.
Urban Retail Loan Fund
The Urban Retail Loan Fund (URLF) is a revolving loan program intended to stimulate economic growth and support for residential and neighborhood development in Detroit's Greater Downtown area by providing loans to neighborhood-based retail, service, and storefront businesses. These businesses, in turn, will provide necessary goods and services to the neighborhood, create and retain jobs, and promote a high quality of life. The Detroit Investment Fund created the Urban Retail Loan Fund in partnership with the Michigan Economic Development Corporation (MEDC) to assist neighborhood businesses and drive additional economic activity in the community. To be considered for a loan under this program, applicants must be able to contribute meaningful owners' equity in their projects, present a viable business plan, and demonstrate a successful track record.
Loan Size
$50,000-$500,000 (Preferred range of $100,000-$200,000)
Loan Terms
Fixed amount term loans with flexible structure and repayment; Typical maturity will be three to five years; Fees and interest rates will be determined based on the project's risk profile and capacity to repay; Reimbursement by borrower of reasonable closing costs
Target Area
Greater Downtown including Corktown, Downtown, Eastern Market, Midtown, New Center and Riverfront.
Eligible Uses
Eligible uses include working capital, purchase of inventory and equipment, and tenant improvements.
Eligible Businesses
Eligible businesses include retailers, service industries, and other storefronts with stable operations, demonstrated management strength, and successful business models. This program is not intended to replace conventional bank and small business financing but to supplement it and to provide financing when alternatives are not available. Acquisition financing of investor-owned real estate is not eligible for consideration under the program.
Collateral Requirements
Security interest in all business assets and guarantees of the key owners is required.
Application Process
Required application materials include but are not limited to historical financial information on the business and owners, projected financial information on the project, biographies of the owners and key management members, and detailed business plans.
Predevelopment Loan Fund
Predevelopment Funds are intended to act as a catalyst for commercial, residential and mixed-use development projects in targeted areas in the City of Detroit. Predevelopment financing assists both individual developers and community organizations by providing funding for costs incurred in the early stages of a project, such as environmental studies or appraisals that facilitate the project's pursuit of traditional financing. To be considered for a loan under this program, applicants must be able to contribute meaningful owners' equity in their projects, present a viable business or project plan, and demonstrate a successful track record.
Loan Size
$50,000-$250,000 (Preferred range of $75,000-$150,000)
Loan Terms
Fixed amount term loans with flexible structure and repayment; Typical maturity will be up to three years; Fees and interest rates will be determined based on the project's risk profile and capacity to repay; Reimbursement by borrower of reasonable closing costs
Eligible Uses
Eligible uses include land acquisition, environmental studies, legal work, tax credit consultants and fees, site planning and design, appraisals, survey work and construction required to preserve the structural integrity of a building.
Eligible Projects
Housing development projects including single, multi-family and mixed-use developments. Commercial projects that have potential for significant positive impact on the community are targeted.
Collateral Requirements
Security interest in the real estate and guarantees of the key owners is required.
Application Process
Required application materials include but are not limited to project budget, project sources and uses, source and timing of repayment, biographies of the owners and key project members, and detailed project plans.
New Markets Tax Credit
The New Markets Tax Credit (NMTC) Program attracts private businesses and development by offering tax credits worth 39% of the value of the investment in low income communities, claimable over seven years. Invest Detroit CDE has received three NMTC allocations totaling $98 million. The purpose of the New Markets Tax Credit is to support the development of commercial and mixed-use real estate projects in Detroit by expanding the availability, affordability, and access to commercial capital. Capital will be made available for real estate development, building improvements and new commercial activity. To be considered for an allocation, projects must be located in an eligible area and applicants must have relevant project experience and be able to contribute meaningful owners' equity in their projects.
Project Budget
Minimum of $5 million
Term
The investment must stay in the project for seven years.
Fees
Fees will include upfront fee received at closing, an annual administrative fee and a backend fee at maturity. Other third party closing costs including legal fees, title work, and other professional fees to be paid by borrower.
Interest Rates
Interest rates will be determined based on the source of leveraged funds.
Target Area
The City of Detroit
Target Area
To be considered, projects must be located in the City of Detroit in qualified low income communities and highly distressed census tracts as defined by the CDFI Fund. Projects can be commercial projects or mixed-use real estate including housing units provided the residential component does not exceed 80% of the total project annual project revenue.
Excluded Project / Business Types
Certain business types are excluded by the CDFI Fund, including: For-Sale Residential Projects; Golf Courses; Country Clubs; Massage Parlors; Hot Tub Facilities; Suntan Facilities; Racetracks or Other Facilities Used for Gambling; Stores for which the principal business is the sale of alcoholic beverages for consumption off premises
Collateral Requirements
Security interest in the real estate and guarantees of the key owners is required.
Application Process
Required application materials include but are not limited to project budget, project sources and uses, source and timing of repayment, biographies of the owners and key project members, and detailed project plans.
First Step Fund
The First Step Fund is a pre seed investment fund serving emerging and newly-formed high growth businesses in Southeast Michigan. First Step Fund support is meant to address the deficit of financing in the marketplace and to promote economic development by identifying, nurturing and fostering demand for early stage, commercially viable, high growth businesses that can scale - resulting in job creation and increased tax revenue for the region.
Investment Size
$10,000-$50,000; From $10,000 to $50,000 initial investments with considered follow-on investments of up to a maximum of $150,000 for qualifying companies. The Fund sometimes partners with other investors for investment rounds that are typically sized between $150,000 and $500,000.
Target Area
Southeastern Michigan with a special preference in the City of Detroit.
Focus
The First Step Fund is industry agnostic and focuses on high growth, emerging businesses that can demonstrate the ability to scale. The Fund has a desire to be inclusive to businesses owned by women, immigrants, and minorities.
Financing Types
Flexible instruments including loans, convertible notes and equity investments
Chase Invest Detroit Fund
The Chase Invest Detroit Fund (CIDF) is a revolving loan fund supported by an investment from JPMorgan Chase and represents a continuation and expansion of its long-term commitment to the City of Detroit. CIDF was created to promote and accelerate economic development that otherwise would not take place. CIDF is a high-impact Fund designed to co-invest with Invest Detroit's managed funds to promote commercial real estate projects and the development and expansion of commercial and industrial businesses. The CIDF also assists with the acquisition of critical properties in targeted areas identified by key strategic initiatives as catalytic projects to advance economic development.
Loan Size
$500,000 to $2.5 million
Target Area
The City of Detroit
Eligible Projects
Business Expansion; Capital Improvements; Purchase of Equipment; Purchase of Real Property; Commercial Real Estate Development; Strategic Investments that Create a Long-Term Benefit for the Community
General Loan Criteria
Sponsors with a proven track record and personal investment in the project; Clear exit strategy for the Fund with expected repayment within 5-7 years; Significant economic impact in the City of Detroit
Detroit Innovate Fund
Detroit Innovate is a seed stage investment fund that fuels the formation and development of high-growth technology companies in the Detroit Region. The Fund assists emerging companies commercializing enabling technologies in the healthcare, transportation, advanced manufacturing and resource efficiency sectors.
Investment Size
$250,000 - $500,000; Detroit Innovate will make initial investments in early stage, high-growth companies of $250,000 - $500,000 with considered follow-on investments up to a maximum of $1.25 Million for qualifying companies.
Target Area
Southeast Michigan with special concentration in the City of Detroit
Focus
Detroit Innovate is focused on scalable technology-based companies in healthcare, transportation, advanced manufacturing and resource efficiency. The Fund has a desire to be inclusive to businesses owned by women, immigrants, and minorities and businesses with high potential to employ women, immigrants, and minorities.
Financing Types
Detroit Innovate operates as an early stage venture capital fund, investing through equity rounds and convertible notes with warrants/discounts.
Venture Development Organization (VDO)
Invest Detroit's VDO Program is designed to drive new, high potential company formation in the Detroit region by
Building partnerships among regional assets that support entrepreneurship; Connecting high growth companies with existing support programs and investment capital, and; Promoting entrepreneurship throughout the region while being inclusive of opportunities for minorities and women.
The VDO Program complements the investment activities of both the Detroit Innovate Fund and the First Step Fund
by focusing on capital syndication and referrals, talent initiatives, marketing and outreach, and helping to build long term resources that support high growth companies.
The VDO launched its first talent initiative
an Entrepreneur-in-Residence (EIR) Program, in 2013. EIRs are carefully chosen former CEOs and Founders who utilize their industry experience and network to further enhance the Detroit Innovate Fund's reach and capabilities.
EIR activities include
Assistance with deal sourcing, diligence, and formation management; Identification of scalable technologies through researchers, university tech transfer offices, other entrepreneurs, and corporate R&D groups; Commercialization of technologies by forming new companies
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General Info
About Us
Invest Detroit is a certified Community Development Financial Institution and a leading source of private sector financing which utilizes a variety of funding tools through managed for-profit and non-profit targeted funds to support economic and community development in underserved communities primarily in the City of Detroit.