Guest Blogger: Why I Remain Confident in Michigan

Posted by James / on 06/22/2009 / 0 Comments

Intro
By Mike Semanco
President and COO of Hennessey Capital

While all eyes are on Detroit, and unfortunately not for positive reasons, I remain confident in Michigan's future. The woes of Chrysler and GM and ultimately, their suppliers, are documented daily in national and international news. These behemoth organizations are navigating change in times of shifting consumer wants and needs and government mandates and their challenges to survival are significant, though not insurmountable.

As the domestic automotive industry struggles, there's another Michigan that is quietly chugging along - the Michigan that is home to thousands of small and mid-sized businesses. That's the Michigan where I live and work and know best. That Michigan is hurting too (as is the rest of the country), but it's hopeful, and it's fueled not just by the future of a new auto industry, but also by entrepreneurialism that is broad in scope and thinking.

There is a renewed sense of urgency in the business community to be innovative, competitive and forward-thinking.  I see it every day. Measurable action is being taken now to aggressively pursue new products and services in a variety of industries including life sciences, energy, technology, film and entertainment and yes, even auto. It will not be just one industry pulling us through, but several that will shape Michigan's future. 

No, the constraints to sustainable growth in Michigan are not the result of our location (I'm ready to remove the rust belt moniker, how about you?) or geography (with abundant water that most states covet) or intellectual prowess and curiosity (we have no shortage of exceptional colleges and universities) but largely one of available commercial credit.

Like other smart Michigan businesses, Hennessey Capital LLC, a specialty finance company providing working capital to small and mid-sized businesses, wants to diversify, yet our efforts are largely focused on the promise that we believe exists here. For example, Hennessey announced in April that the firm had completed $3.3 million in financing transactions to ten diverse companies, with the majority being Michigan-based. In 2008, a year where credit dried up and commercial lending was increasingly difficult to obtain, even for solid performers, 60 percent of Hennessey Capital's clients were located in Michigan and were the recipients of the majority of Hennessey Capital's $10.4 million commitments for the year.

While Hennessey Capital is pleased to be able to offer financing to select companies via lending products like factoring and asset-based lines of credit, we hope there will be a major shift in traditional credit availability in the near future so we can further encourage innovation and support businesses that provide jobs and present valuable products and services to the marketplace. New programs from the SBA along with the state will help, but as we recover from this downturn, the availability of capital and credit will be critical to entrepreneurial success.  Companies we consult with are more concerned about having access to capital than the incremental costs associated with the non-traditional forms of capital.

When the credit markets re-open, as they will, Michigan will be ready with its water, engineering capacity, trained workforce, history of innovation and a grit that other states envy. Then, Michigan will rise again.  For now, we'll keep planting the seeds.

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Mike Semanco is the 2008 Michigan Small Business Administration Financial Services Champion of the Year. Hennessey Capital (www.hennesseycap.com) provides working capital for growing business-to-business companies that are either pre-bankable but post-revenue, in transition or otherwise do not meet the credit guidelines of traditional bank lending.  Products and services include purchase order financing, factoring, asset-based lending programs, mezzanine debt, receivables management and business coaching.

 

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