Data Center Feasibility Study in Michigan

Michigan: strong rank, weak share

Michigan's data center record contains 27 loans approved from FY2017 to FY2026, with $21.8 million in gross dollars. The state ranks 13 of 52, a respectable position by volume, yet the class is only 25 of 39 inside Michigan, and the location quotient of 0.76x tells us data centers account for a smaller fraction of Michigan lending than they do nationally. A large state can rank high on counts simply because it has many businesses of every kind; the quotient corrects for that and says the class is not a Michigan specialty.

Typical ticket and who holds the loans

The median loan of $185,000 is 0.90x the class norm across the country, and the central band of approvals covers $87,000 to $750,000. The mix is lopsided: 26 loans use SBA 7(a), 1 uses SBA 504, and franchising is nil. In the 7(a) table the only lender listed is The Huntington National Bank, which holds 11 loans worth $3.9 million. Macomb County leads the map with 7 loans, Wayne has 5, Oakland 4, and Grand Traverse, Kent and Washtenaw 2 each; Antrim, Houghton, Livingston and Otsego have 1 each.

Outcome floors withheld

The cohorts of Michigan data center loans hold fewer than 30 loans, which is Loan Analytics' own minimum for showing a cancellation or charge-off rate. Both rates are left off the page, and they are not zero. Because rates in this program are floors that can only rise as open loans mature, a blank is the more honest statement than a hopeful number.

What a study for a Michigan data center must prove

Power comes first: capacity, redundancy and the price per unit at the specific site. Then comes the customer base. A study needs named or credible tenants, contract lengths and the share of capacity that must be leased before the project covers its debt. It should compare building and equipment cost with the usual ticket in this record, which is far below the cost of a large facility, so a bigger project must explain its financing beyond SBA. Debt service coverage should be tested under a slow lease-up and a tenant departure, and the appraisal will depend on contracted revenue, not on square footage alone.

The code that includes colocation also covers hosting and data processing firms, so the loans listed above are a wider group than purpose-built facilities for third-party tenants.