Helping Small Businesses Obtain the Loans They Need to Expand and Grow

If you ask small business owners what their greatest needs are, generally they revolve around funding. The Delaware Division of Small Business (DSB) can help through its State Small Business Credit Initiative (SSBCI).  In 2023, Delaware was awarded $60.9 million in federal funds for four programs; two of which support loans for small businesses: the Delaware Loan Participation Program, and the Delaware Capital Access Program.

The goal of SSBCI is to make loans available so that small businesses, especially those in underserved or economically and socially disadvantaged areas, can expand and grow.   Funds are intended to target those businesses that need access to capital, but fall behind on one or more credit metrics, such as lacking collateral, or having a short credit history.

SSBCI funds can be used for any business purpose, including start-up costs, working capital, franchise fees, equipment, inventory, and the purchase of, or improvements to, an eligible place of business.

“SSBCI is an important component in our suite of financial programs and incentives,” said DSB Director Regina Mitchell. “Through it, we are able to address the vital need for small business funding and create a network of partnerships with financial lending institutions throughout the State.”

How It Works

To start, the small business owner should contact DSB to speak with one of our four Regional Business Managers (RBMs). The RBMs review the lending programs’ minimum qualifications, which determines if the small business readily qualifies. If so, the RBM will connect the owner with one of our participating lenders. Currently there are three participating lenders, Del-One Federal Credit Union, True Access Capital, and Community Bank Delaware.

If the lender also believes the business owner qualifies for one of the programs on their end, they contact DSB, and the Division helps provide the lender with the support necessary to get the loan approved.

But we know some small business owners are not quite ‘bank ready’. In April 2024, DSB awarded the Small Business Development Center (SBDC) a technical assistance contract to provide one-on-one support to business owners who need a little more assistance.  In these cases, one of DSB’s Business Managers will refer the owner to the SBDC to get them better prepared, and in a stronger position to qualify for, one of the loan programs. Once the owner has completed its work with the SBDC, he/she will be referred to the participating lenders.

The Programs

Delaware Loan Participation Program (DELPP)

The DELPP is most appropriate when a lending institution may not cover the full amount of the requested loan. DSB can support the lending institution with up to 50% of the loan amount. New! In July 2024, DSB lowered its lending rate to 5%, with additional rate reductions of 1% each for certain businesses. The lender’s rate is then blended with the DSB rate, resulting in an overall lower interest rate for the business owner.

Delaware Capital Access Program (DCAP):

The DCAP program uses a risk-pooling concept to reduce the lender’s risk should the borrower default on the loan, thereby increasing the chance for the borrower to get funded.  Here, multiple borrowers within the same lending institution contribute premium payments to one reserve fund that the lender can use as collateral to support a loan.

Most Delaware small businesses, including corporations, partnerships, sole-proprietors, independent contractors, nonprofits, and cooperatives are eligible for these programs.

Information about all of the SSBCI programs, fact sheets and lender enrollment forms can be found at de.gov/ssbci.