Wilmington is partnering with Discover Bank and the National Development Council to offer low-interest fixed rate loans to existing business looking to expand within the city.
Loans obtained through the $4 million Grow Wilmington Fund feature longer repayment terms and lower monthly payments. They will fund working capital, machinery and equipment, real estate acquisitions or renovations and improvements to businesses with at least three years of operation.
City economic development director Jeff Flynn said adds Wilmington will use the fund to promote job growth and economic development through existing businesses and recruitment of new ones.
"We're going to go out and get the word out," said Flynn. "We're going to put together a marketing strategy to look up and down - frankly, up and down the East Coast for companies that want to locate here in Wilmington."
Flynn adds the funds are special because they match the term of the loan to the life of the assets being financed, ensuring debt service does not exceed available cash flow.
Categorized as a 7A Small Business Administration loan product - with up to 75 percent guaranteed by the federal government - the fund opens up access to capital normally unavailable in the private market.
The partnership with Discover allows for much lower repayment rates.
Discover president James Roszkowski says providing the capital for the loan program is a way for the traditionally consumer-focused bank to play a role in the growth of First State businesses.
"That's why an initiative like this is very attractive to us. We're not looking at this as something that will generate future business for us," said Roszkowski. "It's more of an economic development, community initiative that we feel is important as a good corporate citizen of Delaware."