Loan Product (FAQ)
Frequently Asked Questions
Who are we?
GDF is a consortium of private, public and non-profit organizations. Together we are working to support business growth in Delaware by lending to small and medium size companies. With longer loan terms and below-market interest rates, GDF can help businesses stretch their cash flow and save thousands of dollars through lower monthly payments.
Grow Delaware Fund exists to help fund the growth of small business in our state. Business loans range from $150K to $4M, feature low interest rates, longer repayment terms, and lower monthly payments. (Subject to underwriting guidelines and loan fund availability).
How does Grow Delaware Fund work with the borrower?
Grow Delaware Fund is managed by West End Neighborhood House, a Delaware based non-profit. West End is responsible for outreach to Delaware businesses and serves as the local point of contact throughout the loan process. The loans are underwritten and serviced by Grow America Fund (GAF). GAF is a Community Development Financial Institution (CDFI) licensed under U.S. SBA Preferred Lenders Program. Unique to our funding model is the personal attention provided throughout the process. Deepa Singh, with West End and Conor McCarthy, as loan officer with GAF, will work directly with the business owner and, if owner chooses, the business accountants, from start of loan process to closing. There is no hand-off to a central underwriting department.
Who is eligible?
This program is open to qualified, existing businesses that:
Are located in or seeking to open within the State of Delaware
Have been in operation for at least 2 full years (case by case exceptions made for ‘younger’ businesses)
Have 2-500 employees and revenues generally between $200,000 and $20 million (subjection to the SBA size standards by industry)
Need working capital, machinery and equipment, real estate acquisition and/or renovations, tenant improvements, or to refinance existing debt
Real estate investment or development projects and financing entities are not eligible.
Is there an application fee?
There is no application fee. After going through the eligibility process, many businesses have found it a cost effective way to receive a loan term sheet from GDF, enabling them to compare and choose amongst lenders for a product that best fits their business finance needs.
How much can a business borrow?
Up to $4M. Historically, our loans have typically ranged from $150k to $2.5M. The amount a business and its affiliates can borrow is subject to underwriting guidelines and availability of funds.
How can loan funds be used and what are the repayment terms?
Working Capital-to be repaid over 10 years
Machinery & Equipment- to be repaid over 10 years
Real Estate Acquisition and/ or Renovation- to be repaid over 25 years
Tenant Improvements – to be repaid over the life of the lease
Are there closing fees?
Once the loan is approved, the applicant pays a 1% deposit at commitment letter signing for appraisal, legal and other costs prior to closing
Closings costs may be financed into the loan
SBA guarantee fee
What are the interest rates?
7-year treasury 3.17% with an indicative rate of 6.05% as of 5/25/18
Interest-only periods are possible
What guarantees and collateral are required?
Personal guarantees are required from any individual with more than 20% of the business.
Security interest in all available collateral.
For real estate: Flexible loan-to-value, depending on underwriting.
Is any reporting required?
As relationship lender, GDF meets with every business annually. We also expect the business to provide us with financial statements and/or tax returns on at least an annual basis.
What are the public benefits?
As a mission driven non-profit, GAF must meet at least ONE of the following public benefits:
Create and/ or retain permanent jobs
Serve business located in low or moderate income census tracts
Serve minority, veteran and/or women-owned business