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Posted on Thu, Jun 9, 2011 : 5:55 a.m.

Snyder's 'economic gardening' translates into billions in lending for Michigan businesses

By Rick Haglund

Tom Kinnear is a University of Michigan business professor who counts Gov. Rick Snyder as a friend and former student.

“One thing about Rick — if he says he’s going to do A, he’s going to do A,” Kinnear told me. “People should pay attention to what he says.”

During his campaign for governor, Snyder said his economic development strategy would focus on helping existing businesses grow, a process known as “economic gardening,” and would enlist private sector resources in the effort.

His administration did just that earlier this month, signing an agreement with Columbus, Ohio-based Huntington Bancshares to commit $2 billion in lending to state companies over the next four years.

Huntington spokeswoman Maureen Brown said the commitment represents a 15 percent annual increase above the bank’s Michigan business lending activity in 2010.

About $1 billion in loans will be made available to businesses with annual sales of up to $15 million and the remaining will be designated for companies with sales of more than $15 million.

Huntington will utilize the Small Business Administration loan guarantee program for some businesses that can’t qualify for conventional loans, Brown said.

In addition to helping Michigan businesses secure needed financing, the lending commitment could be a smart move for Huntington.

That’s because companies needing loans to grow are becoming more attractive for bank financing in what looks like a rapidly improving state economy.

“I think it’s great news,” Kinnear said of the Huntington announcement. “It speaks to one important part of financing for a part of the economy that’s percolating.”

Michigan’s real gross domestic product rose 2.9 percent last year after falling 4.3 percent in 2008 and 5 percent in 2009, according to figures released Tuesday by the Bureau of Economic Analysis.

The state ranked 15th overall in GDP growth last year and second in the Great Lakes region behind Indiana with GDP growth of 4.6 percent.

Huntington’s lending commitment is part of a $3 billion package business assistance package called Pure Michigan Business Connect, which Snyder announced at the Detroit Regional Chamber’s Mackinac Policy Conference.

Most of the program is being financed by the private sector. It includes $500 million in commitments from DTE Energy and Consumers Energy to purchase goods and services from Michigan-based suppliers over five years.

The U.S. Export-Import Bank has pledged to boost loans that help small Michigan companies export from $75 million in 2009 to $187 million by 2015.

And former Chrysler CEO Tom LaSorda is heading an investment group, Stage 2 Innovations, which plans to invest $100 million in second-stage, technology-based companies in Michigan.

Second-stage companies are growing firms that have passed the start-up phase and are generating annual sales of about $1 million a year.

The Michigan Economic Development Corp. also will have $100 million available in the fiscal year starting Oct. 1 to attract business investment to the state.

Kinnear, director of U-M’s Samuel Zell and Robert H. Lurie Institute for Entrepreneurial Studies, said Huntington’s loan commitment could keep growing Michigan companies from leaving the state by providing the financing they need locally.

“We’re more into phase two — how do we help companies grow and help them stay here when they’re sold,” Kinnear said. “If 10 more banks would make similar announcement (to Huntington’s), that would be helpful in keeping businesses in Michigan.”

Email Rick Haglund at haglund.rick@gmail.com.

Comments

alan

Fri, Jun 10, 2011 : 3:08 a.m.

With all the bickering and name calling going on I've noticed that the one thing that never gets attention is the fact that Mr. Snyder has never been a successful business person. He has made himself fairly well off but not much else. 15 years on the board of directors at Gateway and then his stint as CEO during which the company went straight downhill and got sold to ACER for just about exactly the same per share (split adjusted) that it was initially offered for 15 years prior. A 0% return to shareholders in 15 years does not seem like a real good decision maker to me. Oh yeah, SPARK. Being a business person does not necessarily translate to being a good business person.

Epengar

Thu, Jun 9, 2011 : 6:21 p.m.

It's seems ridiculous that the Snyder administration is using a company based outside the state to help finance the "Pure Michigan" business package.

Eric Schertzing

Thu, Jun 9, 2011 : 2:54 p.m.

I'm all for the positive spin. Anyone can get coverage on bad stuff. The governor and the bank are getting coverage for a story about a bank lending to businesses. That is their business. And the volume is a modest growth over existing activity. It would also be good to understand IF the utilities are really going to buy any more from Michigan companies then they already do. Guess I'm missing the substance. Sounds good, but what does it mean?

grye

Thu, Jun 9, 2011 : 2:17 p.m.

Lefties have the real answers. Take all the money from business and rich people. Since we don't have it, neither should they. Let's give it all away to those who haven't worked as hard. Businesses don't need that money to grow, create more jobs, and help rebuild our economy. Playing Robin Hood will solve all our problems.

alan

Fri, Jun 10, 2011 : 3:09 a.m.

I think your assumption that people who have money worked harder is fallacious.

Ignatz

Thu, Jun 9, 2011 : 3:58 p.m.

I'd be interested in seeing any researchable quotes stating anything you wrote from any "lefties" who have influence on policy . I suspect it's more "rightie" unfounded propoganda.

a2lifer

Thu, Jun 9, 2011 : 1:37 p.m.

"One thing about Rick — if he says he's going to do A, he's going to do A" That's complete nonsense. He represented himself as a moderate and swerved sharply to the right after entering office. His "economic gardening" is slash and burn for those who are middle class, poor or disadvantaged. His EFM law is a direct attack on democracy. As a Christian, I am disgusted by his social values, which basically amount to shoving billions of dollars at corporations and balancing the budget on the backs of the poor and middle class. I work as an advocate for the disabled and it is simply barbaric what his budget does for this community.

Marshall Applewhite

Thu, Jun 9, 2011 : 2:01 p.m.

He has done exactly what he said he would. He said social issues weren't anything he was going to be concerned with, and has stuck to this promise. His number one priority was returning Michigan to economic viability, and he's doing exactly that. And thank god someone has finally decided to stop kicking the can down the road.

johnnya2

Thu, Jun 9, 2011 : 11:56 a.m.

"Michigan's real gross domestic product rose 2.9 percent last year" And who was governor for this? Oh thats right, it was Granholm. The rest of this is just more Snyder cheerleading that gives BUSINESS more money while teachers, seniors and students get screwed STILL.

ssAA

Thu, Jun 9, 2011 : 12:42 p.m.

Oops, you forgot the second half of that sentence- "...after falling 4.3 percent in 2008 and 5 percent in 2009." I don't think an acting governor has much affect on the GDP, but if I did, Granholm would have really blown me away.