Kent Growth Fund to offer loans to longstanding businesses
DOVER — After focusing efforts on attracting new businesses, Kent County officials have launched a revolving loan program with favorable rates to help existing businesses expand and grow stronger.
Earlier this summer, the Kent Economic Partnership (KEP) unveiled the Kent County Growth Fund, a loan offered to businesses between 10 to 500 full-time employees in the county. Loans range between $250,000 and $1 million, depending on the underwriting guidelines and the availability of funds.
The Kent County Levy Court authorized $750,000 into the fund, and a $250,000 contribution from Discover Bank, as well as a commitment of $3 million for loan capital. 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.
Loans offered through the Kent County Growth Fund can be used for machinery, equipment, real estate purchases, renovations and more. Under the terms of the program, businesses must be in operation for at least two years to apply, and real estate investment or development projects are not eligible.
Loans for machinery and equipment are to be paid over 10 years, while real estate acquisition and renovation is to be paid over 25 years. Tenant improvements are to be repaid over the life of the lease.
“No one has formally applied at this point, but there are candidates out there,” KEP Executive Director Linda Parkowski told the Delaware Business Times. “One of the ideas driving this was to target our existing companies here. How can we help them with their expansion plans, buy new equipment and keep jobs here? This is an excellent tool to have.”
Parkowski has long since been an admirer of the revolving loan program offered through a partnership between Discover Bank and the National Development Council, a New York-based nonprofit that raises capital for investment in low-income communities.
The NDC and Discover Bank have collaborated on similar projects statewide as well as in Wilmington and Sussex County. ExciteSussex, the loan program in Delaware’s southernmost county, has possibly seen the most success. The $1 million joint investment from Sussex County and Discover Bank has resulted in the issuance of $5.1 million in loans so far to five businesses, impacting 102 jobs.
Discover Bank President Jim Roszkowski noted the bank’s long history in Delaware, and including its Greenwood branch, and its many partnerships with the Small Business Development Center and the NDC to help “positively impact where customers live, work and play.”
“It is hope is that with the funding provided — as well as financial and technical support of Kent County and the lending capacity and expertise of the National Development Council — will put a valuable tool in the toolbox for Kent County’s Economic Development office to grow and support business opportunities in our backyard,” Roszkowski said in a statement.
If approved, Applicants to the Kent County Growth Fund pay a 1% deposit to commit to the closing costs of the loan. Closing costs with the SBA fall between 2% and 3%, and can be financed through the loan.
Interest rates are determined by the current market when a loan is received.
For more information, visit https://www.choosecentraldelaware.com/clientuploads/KC_growth_fund.pdf.