Lake Trust Nurtures Local Entrepreneurs

A partnership between the Michigan-based credit union and a local economic development group is helping new businesses test concepts and gain business experience via a new incubator space.

 
 

Top-Level Takeaways

  • Lake Trust Credit Union has partnered with Downtown Lansing, Inc. to create a development and retail space for entrepreneurs to test and grow their business ventures.
  • Additionally, the credit union has committed $1 million to loans of $50,000 or less to help small businesses.

A partnership involving Lake Trust Credit Union ($2.5B, Brighton, MI) not only allows budding entrepreneurs to test new business ideas but also provides a retail space where those projects can thrive.

In late 2021, Lake Trust partnered with Downtown Lansing, Inc. — an economic development group headquartered in the capital city’s central business district — to create the Downtown Lansing Middle Village Micro Market. The pairing makes sense. The credit union is certified as a Community Development Financial Institution and also was headquartered downtown until its 2015 move to nearby Brighton. It opened a new branch near the Lansing city center during the summer of 2021.

Lake Trust partnered with Downtown Lansing, Inc. to create a combo incubator/retail space for local, budding entrepreneurs. Image courtesy of Downtown Lansing Middle Village Micro Market. Click to view larger size.

The roots of the partnership date back to early 2021, when Downtown Lansing leaders came up with the idea for an incubator space where new businesses can test their viability. The organization secured an 1,800-square-foot space during the fall, and the space now serves as an incubator atmosphere for startups as well as shop space for more seasoned retailers.

“We believe in community wellbeing and financial wellbeing,” says Theresa Dubiel, Lake Trust’s senior vice president of member experience and business development. “The opportunity to have a space that is rent-free to provide an opportunity to explore and find your place is what this program is all about.”

What organizers didn’t want was to add extra costs on the new businesses.

“We turned to Lake Trust because of the way it helps businesses,” says Cathleen Edgerly, executive director of Downtown Lansing, Inc. “We have a lot of the same goals for transforming our neighborhoods and our state. It was a natural fit, and it’s been an incredible partnership. This is something that will be incredible for the future of Lansing.”

Lake Trust has agreed to a five-year partnership that not only subsidizes the retail space, which allows entrepreneurs to launch their businesses rent-free, but also provides financial counseling and mentoring for each startup.

“They can focus on a solid foundation and sustainable business model and not have to worry about all the startup costs,” Edgerly says.

CU QUICK FACTS

LAKE TRUST CREDIT UNION
Data as of 12.31.21

HQ: Brighton, MI
ASSETS: $2.5B
MEMBERS: 177,271
BRANCHES: 23
12-MO SHARE GROWTH: 13.0%
12-MO LOAN GROWTH: 5.2%
ROA: 0.75%

In November, Downtown Lansing selected its first four participants for the market: a small bookstore, a bakery for those with unique food allergies, a vendor of locally produced bath and body products, and a tie-dye sportswear company.

“Everything changed in the pandemic,” Dubiel says. “People began exploring business ideas and whether their ideas will work. As their ideas percolate, we wanted to give them a space to get started. That vision has really come to life.”

The Bigger Picture

The micro market is part of Lake Trust’s broader objectives as a CDFI.

After obtaining CDFI certification in 2017, the credit union launched a microlending program in 2019. It committed $1 million to loans of $50,000 or less to help small businesses. That program has provided everything from funds to purchase landscape equipment and delivery trucks to lines of credit to help with cash flow.

Brandalynn Winchester-Middlebrook, SVP of Culture and Community Engagement, Lake Trust Credit Union

Lake Trust has made more than 230 microloans since the program’s launch, directing $5.5 million to local businesses. Aside from lending, a partnership similar to the one in Lansing is underway in Howell, and the credit union has also helped launch a commercial kitchen in Lansing that allows local farmers and producers to prepare their products in a shared space known as “The Maker Kitchen, Powered by Lake Trust.”

“We believe in helping our communities with what they need,” says Brandalynn Winchester-Middlebrook, Lake Trust’s senior vice president of culture and community engagement. “Businesses are a big part of that success. We need to support them, especially as they’re starting out.”

Leases accounting for more than 1 million square feet of retail space in downtown Lansing were cancelled during the worst months of the pandemic, says Edgerly, leading many businesses to board up and move on. Even though the micro market occupies a relatively small space, she adds, it is having a big effect on the long-term prospects for new ideas and sustainable businesses.

“Retail is not dead,” Edgerly says. “It’s nice to see that buzz of activity and have businesses move into the bricks and mortar spaces.”

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Since the micro market program began in November, three of the original four businesses have graduated to take up permanent retail residency in Lansing’s downtown area.

“It was validation that these types of programs are sustainable and that they will go a long way to helping our businesses and communities thrive,” Winchester-Middlebrook says.

A new cohort began its entrepreneurial journey this spring, and the program has expanded from four participants to six. Each startup will have the space for one year, giving them the opportunity to grow their customer base before moving on to a permanent place and contribute to the local economy.

“It’s even better than we expected,” Edgerly says. “There is a lot of risk starting something like this because we didn’t know how receptive the community would be, but it has been incredible.”

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