[caption id="attachment_16665" align="aligncenter" width="1000"] Pete Kennedy and Linda Richardson walk past Sacred Heart Village II, a new apartment building for low-income older residents rising at Tenth and Spruce streets on Wilmington's East Side. The Ministry of Caring received a $1.3 million Downtown Development District Grant from the Delaware Housing Authority and a $4.2 million HUD grant to help pay for the structure. It is their second low-income senior apartment building in Wilmington//Photo by Ron Dubick.[/caption]

By Kathy Canavan

Have a business idea in the back of your mind? There's free help and even free money to help you create your dream.

D.J. Hill and Chad Moore are financing most of their $10 million Lefty's Alley and Eats project with a fixed-rate 504 loan from the Delaware Community Development Corp. The bowling alley-arcade-restaurant-bar-laser tag arena will open Oct. 1.

"I can plan five, 10 years ahead, because I know I have that fixed rate. It's a very valuable program," Hill said. "Honestly, it was one of the best programs I worked with during this entire project. Typically, when you think of anything associated with government intervention, you think it's going to be very cumbersome, but I found that not to be true."

The cost of doing business can drop precipitously if you combine government loans, government grants and free advice from experts like those at the Delaware Small Business Development Center.

Counselors there will help you write a business plan and make sure you're well prepared to meet with a lender. "Our services are free, and we love helping our customers, " said Bill Pfaff, the center's director for Southern Delaware. 

For more information, visit http://delawaresbdc.org/business-assistance/request-assistance/

Pfaff said he steers entrepreneurs to local banks and credit unions to start their searches for capital. He said the lenders there connect borrowers with government-backed lenders if they cannot offer affordable financing. "Your bank is your first line of action," Pfaff said.

M&T Bank is the SBA's No. 1 lender in Delaware for 2015, calculated on the number of loans made, with 58 SBA loans totaling $7.9 million, and the bank works with six government-loan programs. "We work to understand what's important to a client and what their goals are, and then determine the best options for them," said Nick Lambrow, president of the bank's Delaware region. "Part of our role is to help government agencies to help small business. We educate our clients about various programs that are available and then serve as a conduit or facilitator."

[caption id="attachment_16664" align="aligncenter" width="1000"] Edward Richi and Rebecca Fay, two staffers at the Delaware Historical Society, walk through the new glass connector paid for with Downtown Development District Grant money. CEO Scott W. Loehr said the connector makes it much easier for all the historical society's employees to collaborate.[/caption]

There are dozens of programs to help finance fledgling and flourishing businesses:

The Delaware Community Development Corp. that Hill and Moore used is a non-profit SBA-certified a development company that provides U.S. Small Business Administration 504 fixed-rate loans for fixed assets statewide.

The development corporation works with local banks to provide the loans, with the banks financing half the project, the development corporation financing 40 percent, and the borrower responsible for 10 percent equity.

The SBA's 504 Debt Refinance Program has been permanently reinstated, which means small business owners will soon be able to refinance all eligible business debt into new fixed-rate loans through the 504 program. The refinancing was previously limited to fixed assets. Visit http://www.wedco.org/loanprogram.php

The Wilmington Economic Development Corporation provides $25,000-to-$50,000 loans to small startups and existing businesses in the City of Wilmington only. Ninth Street Book Shop, La Fia Restaurant, Zaikka Indian Grill, Sterling Grille and Shop Mamie all were financed partially through WEDCO loans. The average loan is $40,000, and the money can be used for equipment, inventory, working capital, or lease-hold improvements. Visit http://www.wedco.org/wedcoloanprogram.php

First State Community Loan Fund offers a lucrative savings program plus business loans for small businesses.

It offers three loan funds:

• The Micro Loan Fund offers loans from $5,000 to $50,000, and the money can be used for most business purposes.
• The Business Growth Fund offers loans from $51,000 to $250,000, typically to businesses that have been operating for at least two years. The money can be used for most business purposes.
• The Community Development Loan Fund provides loans up to $500,000 for community-based projects, such as childcare centers and mixed-use properties.

The loan fund's Business Saver Program is a federally sponsored savings program that helps low-income entrepreneurs score big dividends. Those saving to start or expand businesses may bank up to $2,000 and receive $4,000 for their effort, walking away with $6,000 on a $2,000 investment. For more information, contact Delores Lee at dlee@firststateloan.org

Lucky City of Wilmington residents: The city developed a Business Savers Plus Program in conjunction with First State Community Loan Fund. The city offers an additional money match for city residents and city businesses that save with First State's Business Savers Program. Under that program, city savers can receive an additional 50 percent match up to $1,000. So a city resident who saved $2,000 to expand a business could get a total match of $5,000 on $2,000 savings and have $7,000 if he combined his savings, the city match and the loan fund match.

The City of Wilmington's Grow Wilmington Fund offers below-market interest rates and longer loan terms that can help city businesses and businesses willing to move to the city stretch their cash flow. It's open to businesses that employ at least two people, have been operating for at least two years and have revenues between $500,000 and $20 million, except real estate development and investment projects. "If you're a small business or somebody who has an idea for a business, we're ready to help at any time," said Economic Development Director Jeff Flynn.

Visit http://www.wilmingtonde.gov/docs/2311/CoW-GAF-FAQ.pdf

The Delaware Division of Natural Resources and Environmental Control offers several grants and loan programs that businesses may qualify for:

• The Universal Recycling Grant and Low-Interest Loan Program has $500,000 available to fund projects that encourage recycling. Bill Miller, the environmental program manager, said any business involved in waste reduction will be considered. Information is posted at http://www.dnrec.delaware.gov/dwhs/Recycling/Documents/UR%20Commercial%20Grant%20and%20Loan%20Guidance.pdf
• The Water Pollution Control Revolving Fund offers low-interest loans for green infrastructure projects, surface-water management projects and projects focusing on the collection, conveyance and treatment of wastewater. E-mail greg.pope@state.de.us or call (302) 739-9941.
• The Septic Elimination Loan Program offers low-interest loans up to $35,000 for individuals and $250,000 for community projects and mobile-home parks. E-mail jessica.velazquez@state.de.us or call (302) 739-9941.
• Low-interest Agriculture Loans are available for poultry and dairy farmers who want to fund improvements following agricultural best practices. E-mail sharon.webb@state.de.us or call (302) 739-9922.
• If you redevelop a contaminated property, Brownfield Grants up to $625,000 for public entities and nonprofits or up to $200,000 for private entities may help pay for remedial costs. Preference is given to projects with public benefit, such as affordable housing, LEED-certified green buildings and development consistent with Delaware's smart-growth principles. Visit http://www.dnrec.delaware.gov/dwhs/sirb/Pages/Brownfields.aspx

For additional information on Division of Natural Resources programs, go to http://www.dnrec.delaware.gov/fab/Pages/default.aspx

Sussex County offers a low-interest Economic Development Loan of up to $250,000 per project for financially stable companies that propose programs that create jobs or benefit county residents. For more information call the county economic development office at (302) 855-7770.

The Downtown Development District Grants Fund offers grants up to $475,000 to companies that rehab specified areas in Delaware downtowns. Currently, areas in Seaford, Wilmington and Dover are specified.

The Delaware Economic Development Office makes several loans available to small businesses:

• The State Small Business Credit Initiative provides flexible terms and below-market loan rates to small businesses with fewer than 750 employees. The money can be used for any business expense, including payroll, cash flow, working capital and 504 interim financing.  The economic development office will fund up to 20 percent of the loans up to $5 million. Terms of five years or fewer are preferred. Visit http://dedo.delaware.gov/Small-Business/Small-Business-Credit-Initiative
• The Delaware Capital Access Program is a public-private match program that uses a small amount of public money to generate a large amount of private bank financing. Visit http://inde.delaware.gov/access/
• New or expanding businesses seeking more than $750,000 may be eligible for financial assistance in the form of tax-exempt bonds. Visit http://dedo.delaware.gov/Incentives/Loan-Programs#tax-exempt-bond-financing
• The Delaware Rural Irrigation Program Revolving Loan Fund can help farmers who have been operating for at least two years add irrigation or drill new wells. The program can finance 25 percent of an irrigation project up to $25,000, at zero interest for up to seven years. The goal is to increase Delaware's irrigated farm acreage. Go to http://inde.delaware.gov/DRIP/index.shtml

The office also offers several grants to small businesses, including money for research and development, brownfield remediation, and job creation. For more information, visit http://dedo.delaware.gov/Incentives/Grant-Programs#delaware-strategic-fund.