More details have been released on the Grow Delaware Fund.
The Grow Delaware Fund, which seeks to build on the success of the Grow Wilmington Fund, is a partnership that will provide $5 million to support loans to small businesses in Delaware that are seeking to strengthen their operations and grow jobs.
The new initiative will offer flexible financing to Delaware-based businesses through long-term fixed-rate financing designed to minimize monthly principal and interest payments maximizing a business’ ability to grow. This will allow Delaware businesses to both add and retain jobs.
The fund is supported by the West End Neighborhood House, The Longwood Foundation, Discover Bank, Department of State Division of Small Business Development and Tourism and the National Development Council
The Grow Wilmington Fund, established in 2014, is a partnership between Wilmington Office of Economic Development, Discover Bank, Cozen O’Connor and the National Development Council, an SBA 7(a) lender and community development financial institution.
The fund began with $1 million in seed money from Wilmington’s Urban Development Action Grant Corporation (UDAG), a quasi-governmental non-profit development corporation, wholly-owned by the city of Wilmington. UDAG’s investment leveraged $3 million of private funds to establish a $4 million fund that offers low-interest, long-term loans to small businesses currently operating in Wilmington or looking to relocate to the city.
The fund can be used to acquire real estate, perform leasehold improvements and obtain working capital. Since its inception, the fund has loaned in excess of $3.2 million to support four small businesses that were able to create 17 new and retain 52 existing jobs.
Among the business that have benefitted from the Grow Wilmington Fund are Short Order Production House (formerly, The Kitchen) which used the fund to open its offices at the Joseph R. Biden Jr. (Wilmington) Railroad Station and Paul Campanella’s Auto & Tire Center, which used the Grow Wilmington Fund to move from its former location just outside of the city limits to its new location near the intersection of Concord Avenue and Broom Street.
Owner Paul Campanella hosted the Grow Delaware announcement ceremony Monday at his new Wilmington location at 1005 West 27th Street which is scheduled to open in November.
Grow Delaware Fund loans range from $150,000 to $4,000,000. The amount a business can borrower is subject to underwriting guidelines and loan fund availability. Once obtained, loan funds may be used for:
- Working Capital – to be repaid over 10 years
- Machinery and Equipment – to be repaid over 10 years
- Real estate acquisitions/renovation of owner-occupied businesses – to be repaid over 25 years
- Tenant improvements – to be repaid over the life of the lease
- Refinancing existing debts
Together, the Grow Wilmington and Grow Delaware Funds will leverage over $11 million to assist economic development and job creation, a release stated.
“Discover has been deeply committed to supporting the greater Delaware community for more than 25 years. As we have grown to become one of the leading direct banks, we have remained focused on supporting and promoting job growth in the communities in which our employees live and work,” said James J. Roszkowski, president of Discover Bank. “Whether it’s through innovative financial programs like the Grow Delaware Fund or the thousands of volunteer hours, Discover is focused on making a positive difference in communities around the country.”
Deepa Singh, program manager for the Grow Delaware Fund highlighted the fund’s state-wide approach: “The program’s outreach efforts have helped to catalyze the growth of a network of existing public/private/non-profit resources working collaboratively to support Delaware small businesses. Small businesses in all three counties have started the application process with the Grow Delaware Fund.” Singh will be available throughout the state to meet with businesses and promote the program.
Earlier this year, West End Neighborhood House kicked off the Launcher Entrepreneurship program. Launcher was created to educate aspiring entrepreneurs on the fundamentals of starting their own businesses and help existing businesses expand. West End’s program is based on four primary components, which include: (1) business training, including classroom instruction and one-on-one mentoring focused on the basic elements of starting a business; (2) business support, such as topic-specific workshops taught by local experts; (3) loans/access to credit, provided by a local Community Development Financial Institution (CDFI); (4) business incubators – shared office and workspace to reduce costs and facilitate collaboration.
