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Small Business Loans in Michigan (2021 Update)

Michigan is in the center of the U.S automotive industry and is not new to steady business growth. The 2008 financial crisis hit Michigan in a big way, but the state is quickly getting back on its feet through small and medium business development.

Businesses in their startup modes usually struggle with expansion plans against meager cash flows. That's why funding is a critical part of small business development. Numerous financial institutions offer small business loans in Michigan, and it pays to compare rates and settle on a fair deal.Small Business Loans in Michigan

According to a survey in 2015, Michigan recorded 39.51 small business loans for every 100 people in the state which was a 64.90% growth from 2012. The average SBA loan per individual was $185,119 which accounted to a $2,072,457 in venture capital. The state started off slowly but is now quickly catching up with the other states with a score of 38.21.

Lending Banks in Michigan

Some of the top lending banks in Michigan include Northern Michigan Bank & Trust in Escanaba which gave out about $ 1.4.8 million, Alden State Bank in Alden gave out $ 55.6 million, while Honor Bank issued $ 66.5 million. First Community Bank in Harbor Springs gave $ 91.7 million, and Michigan Commerce Bank in Ann Arbor gave out 189.4 million, among others.

SBA Business Loans in Michigan

If you're looking to get some of the lowest interest rates in small business loans, then the Small Business Administration (SBA) is a better option for your startup. They offer a variety of specialized loans through various approved lenders and guarantees over 90% of the value sought for financing. This enables lenders to supply loans making it easier to acquire loans.

Small Business Incentives in Michigan

The state of Michigan supports small businesses through various lucrative incentives including:

  • Tax incentives for creating a particular number of quality employment opportunities.
  • Tax breaks for businesses looking to export their products.
  • Retail food outlets can receive property tax breaks for enabling more people to access healthy foods.

Alternative Funding Resources in Michigan

The banks primarily offer the best terms and rates for small business loans, but not all startup businesses can meet their stringent requirements. If you're not able to meet such requirements, all is not lost since you can access alternative lending options in Michigan. Here are some options to consider:

  • Basic MI Business Loans- a variety of programs offer this option including business lines of credit, SBA loan guarantees, export loans, equipment financing, and term loans.
  • Business Loans for Minorities- with the unique demographics of the state of Michigan, the minorities are offered loans to encourage equal opportunity.
  • Michigan Agriculture Loan- the thriving agriculture in Michigan can receive loans, especially in the rural areas.
  • Veteran Business Loans- military soldiers can build a successful business after serving the nation.

Banks in Michigan That Offer Small Business Loans

Below are the best banks to go to in the state for your small business loan needs:

Traverse City State Bank

Founded in 2000 in Traverse City, Traverse City State Bank makes up for its being a new player in the field with the vast array of services. It specializes in business banking services including investments, savings, and loans.

Alden State Bank

Alden State Bank is currently headed by its President and Director, Thomas R. Lane. Founded in 1934 in Alden, MI, its services remain dedicated to enriching and improving the lives of the communities it serves.

First Community Bank

While headquartered in Arkansas, First Community Bank has already expanded in Michigan since its opening in 1997. It maintains its community bank nature despite having branched out so far already.

Honor Bank

Honor Bank was founded in 1917 in Honor, MI and is now one of the most accommodating banks for small businesses in the state.

Michigan Commerce Bank

One of Capitol Bancorp’s largest affiliate banks, Michigan Commerce Bank has many offices across the state including Detroit, Holland, Kentwood, and Farmington Hills.

Northern Michigan Bank and Trust

Northern Michigan Bank and Trust was founded in 1892 and was based in Escabana, MI. However, since March 2016, it has been operating as a subsidiary of First Bancshares Corp.

Top Cities in Michigan and Their Lenders

Michigan is one of the northernmost states in the country – it sits on the shores of the Great Lakes. The recent economic problems in the country have hit Michigan hard. Much of the manufacturing industries in the state have declined rapidly, causing serious job losses and economic problems throughout the area. Fortunately, Michigan is on its way to making a full recovery. The state has seen rapid regrowth in recent years. There are a few major cities with opportunities for massive growth.

In this article, we’ll take a look at some of the best cities in Michigan for small business owners. We’ll also have a look at what you can do to find the best lender in the area!

Detroit, Michigan

Detroit was at the center of the 2008 economic collapse – the once proud city experienced serious economic troubles. But it appears that things have begun to return to normal. Detroit is now once again experiencing growth, and living costs in the area are still at an all-time low. It could be a great place to start a new business. Below are our favorite lenders currently operating in Detroit:

Level One Bank

We’ve picked Level One Bank as our top Detroit lender because of how customized their lending solutions are. They work with you to plan an overall strategy on how to get the most out of your borrowing experience. They’re one of the top lenders in the state!

First National Bank of Michigan

First National Bank of Michigan is another of our favorite Detroit lenders. They’re also a major lender that has the power to provide substantial business loans to their clients. If you think you’re going to need a bit more capital than you can find with other lenders. This is a good choice.

Grand Rapids, Michigan

Grand Rapids is the second largest city in the state of Michigan – it’s not quite as cheap of a place to live as Detroit. The area is well-known for being a powerhouse in the healthcare industry. They also have some manufacturing industry in the area. If you’re looking to live in a place that is a bit safer than Detroit, this is a good option. Below are our favorite lenders in the area:

Adventure CU

Adventure CU is our top pick for the Grand Rapids area. They have a full understanding of the local economy and how it works. They also have a wide variety of different loans they offer. Equipment loans, terms loans, and lines of credit are just a few of the types of business financing you’ll be able to receive from this lender.

First National Bank of Michigan

While First National Bank of Michigan was also mentioned as one of Detroit’s top lenders, it’s hard not to also to mention them for Grand Rapids. Again, if you’re looking for a top lender in the Grand Rapids region, this is definitely your biggest option. They have the financial power to provide you with large loans. They also provide their clients with business credit cards and business checking accounts if you’re looking for other financial products.

Warren, Michigan

Warren is one of the largest cities inside the Michigan region. The area also has its roots in manufacturing and assembly lines. The area was also hit hard in the recent economic upheaval, but is making a nice recovery. Our favorite lender in the area is listed below:

Patriot Financial

Patriot Financial is our favorite lender in the Warren, Michigan area. They’re well known for partnering with local business in Warren to provide a range of different financial solutions. Aside from regular term loans and lines of credit, Patriot Financial also provide equipment leasing solutions to their Warren clients.

Sterling Heights, Michigan

Sterling is one of the major suburbs near Detroit. Like Detroit, it benefits from low housing costs and a resurging economy. It’s a good spot to look at depending on the type of niche you’re planning on entering. Our favorite lender in the area is listed below:

TCI Capital

Our top pick for Sterling Heights is the lender TCI Capital. They’re a regional lender that provide business lending services to business owners throughout Michigan. They’re a great choice if you think you may need factoring in the future – they’re one of the biggest invoice factoring providers in the region.

Ann Arbor, Michigan

Ann Arbor is the home of the University of Michigan – one of the most famous universities in the country. If you’re looking to start a business that benefits from the commerce of a college town, this is a place to look at. Our favorite lender in the area is listed below:

Ann Arbor State Bank

Our top pick for Ann Arbor is the Ann Arbor State Bank. They’re a full-service bank that can help provide you with small business loans and other business banking services. They have local branches in Ann Arbor that you can walk into to speak with a lending specialist.


Despite the numerous small business funding options in Michigan, it's important to make comparisons and choose the right loan for your business. Check the requirements stipulated by banks and see if you're qualified. Seek alternative financing options and take advantage of the various small business incentives offered by the state.


Remember, some of these companies or banks are very specialized and may only handle SBA loans or a business line of credit. Ask them about any special programs for minorities or women. Also ask for information about business grants for startups if that interest you. If you bad credit don't worry as there still may be other alternative lenders willing to work with you.