NORTHERN MICHIGAN – Northern Initiatives, a Michigan-based community development financial institution (CDFI), has been notified by the U.S. Department of Commerce Minority Business Development Agency (MBDA) that its Capital Readiness Program grant has been terminated, effective immediately. Nearly $2 million in future funding will be lost, jeopardizing technical assistance for socially and economically disadvantaged entrepreneurs seeking access to capital.
In its letter, MBDA stated, “…MBDA has determined that your grant is unfortunately no longer consistent with the agency’s priorities and no longer serves the interest of the United States and the MBDA Program. MBDA is repurposing its funding allocations in a new direction in furtherance of the President’s agenda.”
The termination follows Executive Order 14,238, “Continuing the Reduction of the Federal Bureaucracy,” which directed federal agencies, including MBDA, to eliminate non-statutory functions and reduce operations to the minimum presence required by law.
The MBDA is the primary federal agency tasked with assisting minority-owned business enterprises in overcoming historical social and economic disadvantages.
“CDFIs are the on-ramp for people to enter our economic system,” said Elissa Sangalli, president of Northern Initiatives and chair of the Michigan CDFI Coalition. “We have a significant impact providing affordable and flexible capital throughout Michigan to small businesses, first-time homeowners, and community projects that wouldn’t otherwise happen. CDFIs have often been a quiet part of the economy, but a very important part.”
In 2023, Northern Initiatives was the only Michigan CDFI to receive a four-year, $3 million Capital Readiness Program grant. The funding allowed Northern Initiatives to offer technical assistance to over 100 small businesses annually—businesses that might not otherwise receive support. About $1.875 million of the awarded funds were still pending before the termination.
Without these funds, hundreds of entrepreneurs and small businesses will lose access to crucial resources, negatively affecting Michigan’s broader economic development efforts.
Amy Shindorf, owner and founder of Four Leaf Brewing in Clare, Michigan, credits Northern Initiatives with helping her business launch.
“My relationship with Northern Initiatives has become so secure and established,” Shindorf said. “I initially went to two banks and didn’t have a positive experience. Now, I can’t imagine having to go to a traditional bank.”
Northern Initiatives had planned staffing and program expansions around the grant. Its loss is expected to reduce capital readiness programming, workshops, and one-on-one technical assistance.
In 2024, Northern Initiatives provided $9.4 million in loans to about 100 borrowers, roughly a third of which involved federal dollars. Over 30 years, it has issued more than $112 million in small business loans.
“We’ve touched almost every main street, every community block with one of those loans,” Sangalli said. “Many of those businesses continue on to create jobs and wealth for their communities.”
Michigan is home to more than 55 certified CDFIs, which have collectively deployed $5.6 billion in 59,000 loans over 17 years, resulting in over 41,000 permanent jobs and 27 million square feet of real estate development.
