Fred Joyal was a geography professor at Northern Michigan University in the 1970s, watching local economies swirl the drain as more and more businesses left the Upper Peninsula.
“At the time, its history had been extractive economics – mining, forestry, even fishing. As a faculty member, I was interested in looking at what was going on in the economy and the local area. We were looking at the data, talking to others at the university, and it was clear the economy of the Upper Peninsula was suffering,” said Joyal, now Board Chairman of Northern Initiatives, a nonprofit lender founded in Marquette.
A business consulting initiative quickly morphed into a business investment initiative to help rural entrepreneurs create new, sustainable businesses. A partnership with Shorebank Corp., which was working on a rural economic development program in Arkansas, became the first partnership between a university and a bank.
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Northern Initiatives“The first loan we made was a million bucks” to a large forestry operation at the former K.I. Sawyer Air Force Base. “We were nervous every day,” Joyal said. “Literally all our fish were in the same barrel. If that loan went under, we were going to be in trouble.”
“Another part of this was, because the base had closed, getting a big company in there, that would employ a lot of people, was a big deal,” he said. After about a year, an even larger lumber company bought out the Sawyer operation and Northern Initiatives’ first loan was paid off.
As a Community Development Financial Institution (CDFI), Northern Initiatives has a mission to level the playing field in business ownership. That means more business startups, more funding for business expansions, and greater economic empowerment for everyone living and working in under-invested communities. A small business loan isn’t just a loan; it represents a chance at building generational wealth, improving quality of life, adding jobs, and creating positive, sustainable change.
Its founding documents, however, specified Northern Initiatives would only work with growing businesses and never startups. A future irony.
Northern Initiatives became a U.S. Department of Treasury-certified CDFI in 2000, which coincided with its first Program Related Investment from the W. K. Kellogg Foundation. In 2007, Northern Initiatives embarked upon a geographical territory expansion. The northern, lower region of the state of Michigan was rural, like the UP, and not served by a Micro Development Organization or CDFI. Along with 31 Lower Michigan counties, Northern Initiatives also added the five border counties of Wisconsin to its service area.
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Northern InitiativesA nonprofit lender with a mission to support underserved entrepreneurs, Northern Initiatives is celebrating its 30th anniversary.
As Northern Initiatives reached its 30th year as a private nonprofit lending organization, it also hit a milestone in lending - $100 million to Michigan entrepreneurs.
The loan work is complemented by business development work. Northern Initiatives supports small business owners by offering them technical assistance, training and consulting. Northern Initiatives’ roots in Michigan’s Upper Peninsula inspired one of its most successful programs, Initiate.
The U.P. encompasses 16,542 square miles and Northern Initiatives’ customers went from one end to the other. We realized we needed to harness our knowledge base and get it out to entrepreneurs, and Initiate was born. The online learning portal offers customers access to videos, articles, templates and more about topics including money, management, marketing, sustainability, and quality jobs.
Initiate’s growth turned it into a social enterprise. Northern Initiatives licenses it to more than 40 subscribers across the country who are able to tailor and track their learners’ progress.
In 2017, Northern Initiatives was asked to take over management of more downstate loan funds as regional manager. This meant expanding into 76 counties of Michigan along with the five border counties of Wisconsin. In 2018, Northern Initiatives was invited to develop a loan fund with the W.K. Kellogg Foundation in Battle Creek. Since then, there have been more than 60 loans worth more than $6 million in Battle Creek, along with Business Planning Classes that are held several times a year.
Northern Initiatives estimates that 10 to 14 percent of adults have the attitude and aptitude to be successful as a business owner. Helping communities reach their entrepreneurial potential means providing resources to those who could otherwise be excluded. Northern Initiatives recognizes that, in order to extend greater opportunity to those who show these characteristics, NI must offer access to capital at reasonable rates to those who would never have the chance or who would have entered business undercapitalized.
There are four ways to build wealth, save, buy a home, become more educated or start a business. NI manages to one of those ends through building relationships that allow its capital to be used in support of ideas and people of good character.
What was true in the founding was that rural America was in need of tools that would support innovation, ideas and new business opportunities. That idea has expanded into serving urban communities too. The heart of the idea is that to support and grow start up and family-owned businesses it requires more than money, also know-how. That standard has distinguished Northern Initiatives and underlies its history and its future.