LANSING – The MSF Board has approved modifications in the Business Accelerator Fund (BAF) which provides grants to 16 Smart Zone business accelerators to help high tech companies commercialize technology and grow. These modifications will help the Smart Zone accelerators better support their clients that are now struggling due to drastic economic decline due to the COVID-19 response, and assist companies that are developing innovations that will fight the pandemic itself.
The Business Accelerator Fund, administered by the Michigan Small Business Development Center, supports technology startups by paying Smart Zones to provide professional help from lawyers, engineering, marketing and more that help companies commercialize technology and grow their businesses.
“The program modifications will help three types of companies,” said Phil Tepley, director of the SBDC’s Technology Commercialization Services. “Accelerator clients in financial trouble. Very small Non-tech companies selling PPEs or other critical medical supplies. And technology companies developing technology to improve diagnostics, therapeutics and enabling technology to help the healthcare system.”
Tepley said on Monday a company approached the BAF with a novel approach to killing COVID-19 virus. He declined to identify that company. He also said the SBDC has reviewed companies that have plans to create low-cost ventilators and telemedicine companies that seek to bolster the already overtaxed healthcare system.
Fred Molnar, vice president of MEDC’s Entrepreneurship and Innovation initiative, said the Smart Zones were briefed on Friday and the program enhancements were implemented Monday.
“We’re learning as we go along,” Molnar said. “A lot of questions are popping up. Things we have not anticipated.”
The program enhancements include:
A quicker process do deploying funds available to business accelerators to more immediately provide services to startups, entrepreneurs and small businesses in need;
Expand the permissible use of BAF to include utilities, rent or other services not typically supported through the BAF program. This expanded allowable use of discretionary funds may be used only for existing accelerator clients or past clients that have been previously vetted by the accelerator;
Allow certain non-tech businesses to access services through BAF to support the manufacture or distribution of critical medical supplies and personal protective equipment such as masks, gowns and sanitizer;
Expand company size eligibility requirements and allowable use of funds for tech companies developing innovations that could support COVID-19 response efforts, such as diagnostics, therapeutics, or processes to support the health care system’s response to the virus.
How much money has been allocated? Not nearly enough, Molnar said.
No new revenue has been allocated to BAF. The 2020 allocation allows for $1,180,000 in grants to business accelerators. But the allowable use of funding is no longer limited to commercialization and growth services. The business accelerators may provide services that help their struggling clients survive.
A second enhancement is to allow for up to $25,000 in services to very small non-tech companies to help them manufacture or distribute PPE and other critical medical supplies. The companies cannot have had more than $1.5 million in revenue in 2019, and must show documented interested from a customer or distributor.
A third program is to expand eligibility requirements to allow support for later-stage companies developing advanced technology that will help alleviate the COVID-19 public health crisis. Up to $50,000 in support services are available.
“No one group, no one program will solve this,” Tepley said. “If we all do what we can, then hopefully we will make the bad not as bad and the recovery come sooner.”
For more information, click on https://sbdcmichigan.org/small-business-covid19/