New Grow NCC loan fund to support small businesses

NEW CASTLE – A new revolving loan fund developed by New Castle County, Discover Bank and The Grow America Fund will offer low-interest loans to small businesses, providing beneficial access to capital amid a time of rising rates.

New Castle County Executive Matt Meyer said that Discover and the fund affiliated with National Development Council had approached the county about the opportunity before the pandemic, but at the time capital was readily available and rates were at historic lows.

“There was no business coming to me saying they couldn’t find capital. Now things are changing,” he said. “We are starting to hear that businesses, particularly small businesses, are struggling to get affordable capital; we want to make sure a business that’s healthy has capital to grow.”

Most commercial loans from banks are currently offering interest rates between 6% and 7%, but online-based lenders with lower underwriting thresholds could easily seek interest rates that double or triple that rate.

The Grow NCC Fund will offer longer loan terms and below market interest rates to small businesses employing 10 to 500 employees. Eligible businesses must have been in operation for at least two full years, and real estate investment or development projects and financing entities are not eligible. Loans can range from $250,000 to $1 million, subject to underwriting guidelines and availability of funds.

New Castle County Executive Matt Meyer said the Grow NCC Fund will become a revolving loan fund for county small businesses. | DBT PHOTO BY JACOB OWENS

The initial funding includes $750,000 appropriated by the county, $250,000 donated by Discover and $3 million allocated by The Grow America Fund in a 3-1 match.

“One of the best things about this, unlike a lot of other money we allocate, is a result of revolving loan funding,” Meyer said, explaining that principal and interest payments by borrowers would return to the fund to be lent again. “That will come back and be able to that $4 million can help many, many, many businesses long into the future, and hopefully will remain for decades to come.”

The program is essentially a carbon copy of the ExciteSussex Fund and the Kent Growth Fund, which launched with the same partners. Meyer said his staff has communicated with their Sussex County colleagues, who launched their program first more than five years ago, about how to launch the program. To date, it has supported numerous growing businesses in the southern county including Miller Metal, Tail Bangers and JAYKAL LED Solutions.

“They said they started it small and then kept contributing more money because the revolving fund is getting bigger, making it able to help more businesses faster,” Meyer said.

The Grow NCC Fund will be another tool for County Economic Development Director Charuni Patibanda, who said that she would be tapping social media and traditional stakeholder groups like local chambers of commerce and trade associations to help spread word of the new opportunity.

“We actually have already received our first applicant to the program who found the opportunity just by searching on her own,” Patibanda said.

Long headquartered in Greenwood, the national credit giant Discover has a sizable workforce in New Castle County, which made it a natural partner in Grow NCC.

“Discover is proud to partner with New Castle County and the Grow America Fund on the launch of Grow NCC,” said James J. Roszkowski, president of Discover Bank, in a statement. “Discover is focused on making a positive difference in Delaware, where many of our employees live and work, and we look forward to seeing this impactful program attract and grow businesses while creating additional job opportunities throughout the County.”

To apply for a Grow NCC Fund loan, a representative from the business should call New Castle County’s Office of Economic Development at 302-395-5969.