MKE Tech Hub supports startups with loan program

Less than 1% of all U.S.-based startups receive venture capital funds.

Despite the focus on raising venture funds in the startup ecosystem, most founders rely on other forms of financing or bootstrapping to launch their companies.

MKE Tech Hub Coalition created the FOR-M Loan program to address the funding needs of the vast majority of startup founders.

The revolving loan fund offers low-interest loans to founders of revenue-generating companies who have previously received a FOR-M grant, graduates from a comparable startup incubator, like gBETA or Y.E.S. Blueprint, or are Qualified New Business Ventures certified by the Wisconsin Economic Development Corporation (WEDC).

Founders may borrow up to $50,000 to support their growing businesses.

Loan recipients are selected by a panel of local investors and economic development partners from the Milwaukee Economic Development Corporation (MEDC) and WEDC. Bader Philanthropies is a generous financial supporter of this program.

Approved borrowers enter into a four-year repayment plan with an interest rate determined by the Secured Overnight Financing Rate (SOFR), a benchmark used to set interest rates for other businesses and borrowers set by the U.S. Treasury. The current SOFR rate is 5.33%.

To secure the loan, founders are required to provide a personal guarantee for 20 percent of the total loan. A personal guarantee is an agreement that requires the founder to personally pay back the loan if the business is unable to fulfill the terms of the loan agreement.

MKE Tech Hub is currently fundraising to support this program in 2025. The organization is seeking grant funding but knows additional help from the community will be needed to continue the program.

“Our strategic focus on accelerating the local startup ecosystem is informed by data which highlights a significant gap in venture capital investment in Milwaukee compared to other regions. According to Pitchbook Data and the U.S. Census Bureau, despite recent growth, in 2022 Milwaukee’s venture capital investment stood at just $51 per capita, trailing behind peer metros like Austin ($5,096), Minneapolis ($490), and Indianapolis ($209),” said Aaron Drews, Research & Grants Manager at MKE Tech Hub Coalition.

“The establishment of our revolving loan fund represents a significant step toward sustainably and equitably closing this gap. It augments our work through the FOR-M Incubator and Grants programs to continue to build the pipeline of VC-backable startups in Southeastern Wisconsin and inspire further investment in the region’s tech ecosystem,” he continued.

In June, the program issued $120,000 in loans to Brookfield-based SAFIO Solutions, led by Audrey Walby, as well as Appleton-based SaaS Genhead and Madison-based security technology company Technova Industries.

As MKE Tech Hub Coalition continues its efforts to bridge the funding gap in the Milwaukee startup ecosystem, the FOR-M Loan program offers a vital alternative for startups seeking funding to grow their businesses. By fostering sustainable and equitable financial support, the coalition is helping build a stronger foundation for the region’s tech ecosystem.

Applications for the next funding round close at the end of September. To submit a loan application for review, click here.