LANSING – In an effort to help state businesses that may be having difficulty getting loans, Governor Jennifer Granholm said Thursday the state would provide up to $150 million of state cash to banks and credit unions to make available for business loans.
Details of the program are still being worked out, but Granholm said the program would require the state banks and credit unions to guarantee that up to 80 percent of the money would go for loans.
Caleb Buhs, spokesperson for the Department of Treasury, said the guaranteed loan amount was one detail still being finalized as rules for the program are being drafted.
The program would use up to $150 million of the state’s common cash to purchase certificates of deposit at competitive rates from the banks and credit unions, Buhs said.
One issue still to be resolved is for how long the CDs would be held, since the state would have to have access to cash when major payments are due.
Gail Madziar with the Michigan Bankers Association, said there were not a lot of details available about the proposal, but “any investment of state funds into state banks would be positive.”
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