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Economic Development Government Insider Only Kent County News

Kent County considers revolving loan program

Katie Tabeling

Kent County officials are preparing a revolving loan program in hopes to entice more businesses to central Delaware. | PHOTO COURTESY OF UNSPLASH SCOTT GRAHAM

DOVER —  Kent County is considering accelerating its economic development in the new year, and a new loan program may pay dividends for the local economy.

The Kent County Levy Court is looking at a new revolving loan program in December that will use a combination of public and private funds. If approved, Kent County will invest $750,000 and Discover Bank will add another $250,000. With the involvement of the National Development Council (NDC), the program can leverage the $1 million to generate a $4 million lending capacity with the U.S. Small Business Administration.

No formal agreement has been signed between the Kent County Levy Court, the National Development Council, and Discover Bank as of January.

Kent Economic Partnership Executive Director Linda Parkowski billed the program as a counterpart to Excite Sussex, which has seen tremendous success since it launched in 2017.

“My counterpart Bill Pfaff [the Sussex County Economic Development Director] called me up and asked why Kent doesn’t have a revolving loan program,” Parkowski told the commissioners on Dec. 14. “We’ve talked a few years about it and never pulled the trigger, and this has been very successful in Sussex County.”

While the Kent County Levy Court has blessed the program, the county has not signed an agreement with the NDC that outlines the loan amounts offered, the interest rates and what the loans could be used for. The revolving loan program will not be established until the Kent County Levy Court president signs the agreement and the county transfers its funding share. No timeline has been set, according to county officials.

Once a business has been identified for a prospective loan, the NDC requires tax returns and other financial statements for an initial application. The NDC may do a site visit of the business, and once the loan is approved, they may monitor the business’ financials to understand cash flow and stability.

“Discover is committed to helping people achieve brighter financial futures. That mission reaches beyond our customers and extends to the communities in which we live and work. We are excited to be able to assist growing businesses in Kent County,” Discover Bank President James Roszkowski told the Delaware Business Times.

Both Discover Bank and the NDC are longtime partners in establishing revolving loan programs, as the two entities launched the Grow Wilmington fund in 2014. That initiative lent $4.2 million to eight businesses, retaining or creating 78 jobs.

But perhaps the biggest success so far can be found in Sussex County, where the Excite Sussex has been a draw for many of the county’s recent wins. With the original $1 million joint investment from Sussex County officials and Discover Bank, the program issued $5.1 million in loans so far to five businesses, impacting 102 jobs.

Excite Sussex Loan recipients include $1.4 million for Tail Bangers in Millsboro; $985,000 for Peninsula Paving; $965,000 for Central Sussex LLC operating as the Emory Insurance Agency Inc.;  $850,000 for JAYKAL LED Solutions and $755,000 for Showtime Powersports.

Earlier this year, the Sussex County Council agreed to allocate $3 million to replenish the fund. To date, the NDC estimates that the program has also been able to generate $16 million in small business loans.

That program is open to Sussex County businesses which have been in business for at least two years and employ between 10 to 50 people. Businesses who qualify for Sussex County’s revolving loan program would have to be in business for at least two years, with between 10 to 50 full-time employees. Loan sizes can vary between $250,000 to $1,000,000, and can be used for equipment, real estate, renovations and tenant improvements.

“We’ve really seen tremendous impact throughout the state but also an incredible commitment from Sussex County,” NDC Senior Loan Officer Connor McCarthy told Kent County officials. “We’ve been able to really use these funds to target specific areas that they really don’t have a need to either attract or retain businesses in.”

In the past, Kent County has mainly relied on two tools to draw businesses to central Delaware: a tax abatement program and a Strategic Development Fund. 

The county tax abatement offers a 10-year plan that reduces county property taxes by 90% for the first year, dropping 10% per year after that until it hits a floor at 10% in the ninth year. Companies must invest at least $1 million in a new facility or renovations and hire at least 10 employees to qualify.

The strategic development fund can be used for business loans, working capital, equipment purchases, startup costs and more. The fund was created in the late 1990s after then-Gov. Tom Carper allocated funds through an unexpected windfall to the state, but it had seen little use until recently. The Levy Court awarded Delmarva Corrugated $75,000 and USA Fulfillment $10,000 last year.

Parkowski was very confident that she could successfully pitch the revolving loan program to businesses who are looking to expand.

“One of our existing businesses we have in our portfolio would definitely use this,” she told the commissioners in mid-December.


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