Delaware Small Business Loans

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According to Small Business Administration statistics, there are 88,051 small businesses in Delaware, which make up 98.4% of the total number of businesses within the state. In 2019, reporting large blanks have issued $273.9 million in loans to businesses with revenues of $1 million or less, - a number that has been steadily growing since 2010.

Best Small Business Loans in Delaware

WSFS Bank

WSFS Bank is a Delaware institution, through and through, offering small business loans to businesses of various scales. The SBA program through the WSFS Bank provides approximately $10 billion in loans to small businesses each year.

Their 7(a) loans have a refinancing period of 10 to 25 years and a loan amount of up to $5 million. SBA Express loans of up to $100,000 can be approved in two days and funded within three days. These loans have to be paid back within a term period of three to 10 years.

Other types of loans provided are lines of credit of up to $500,000, term loans to purchase fixed assets, and letters of credit to credentialize purchases for small businesses. WSFS also offers loans for commercial real estate investing and will give loans for commercial mortgages paid back within 25 years.

Dover Federal Credit Union

Dover Federal Credit Union was started by a few air-force veterans with the intention of helping people develop their dreams. The Dover Federal Credit Union offers a wide variety of services to help citizens get small business grants in Delaware. Most popular are business vehicle loans, commercial real estate loans, business checking services, equipment and machinery loans, and credit lines.

To apply for a loan at a Dover Federal Credit Union location, you must fill out a business loan application and a personal financial statement, which you can find on their website. You also need to have a business plan and be able to show personal tax returns from the past two years. Other requirements are to have a business license from the state of Delaware and to have your business registered within the state.

All these requirements may vary, however, based on your prior relationship with the institution and the type of loan you are applying for.

First Citizens Community Bank

First Citizens Community Bank has two locations in Wilmington. It prioritizes cash flow and transparency, offering digital accessibility with all of its loan information and processing with online banking.

They also offer a host of different loans options, including:

• Commercial real estate loans, which have flexible and competitive term rates
• Business lines of credit, which can be repaid based on the flow of your business
• Agriculture loans, at low rates
• Equipment loans, for new and used equipment in a variety of industries
• 504 and 7(a) small business loans of up to $350,000 with an expedited waiting period, and up to $5 million for regular waiting times
• Business term loans with maturity
• Letters of credits for larger purchases
• Accounts receivable financing

Summary

Best Online Delaware Small Business Loan Options

Online bank loans are accessible nationwide and can often be competitive with bank loans obtained within accredited institutions within Delaware. Online loan processes are fast and are easy to fill out.

Additional Delaware Small Business Financial Resources

In this section, we will provide additional financial resources for small businesses in Delaware.

Delaware Prosperity Partnership

The Delaware Prosperity Partnership is run by the Delaware state government and is a blanket term that covers a whole sleuth of business financing grants, research grants, workplace training grants, business networks, and investment networks.

Delaware is essential for any small business owner or entrepreneur. Partnered R&D networks include the Delaware Crossing Investor Group, the First State Angels, the Angel Investment Network Mid-Atlantic, and Leading Edge Ventures. The government also awards EDGE Grants within two tracks: STEM and general startups. Riskier businesses can also be funded through the Delaware Capital Access Program and State Small Business Credit Initiative Participation Loan.

Grow Wilmington Fund

The Grow Wilmington Fund offers Delaware small business loans at below-market interest rates with longer loan terms. The Grow Wilmington Fund is a culmination of efforts between the Grow America Fund and the City of Wilmington's Office of Economic Development. Companies with two to 500 employees, which make between $500,000 and $20,000,000, can apply.

To be eligible for these loans, businesses also have to serve a public function either by creating permanent jobs; serving low- or medium-income areas; being located in redevelopment areas and Enterprise Zone; or serving or being a minority or female-owned business. The loans can be repaid over 10 years, with some specific loans being repaid in 25 years.

The interest rates are fixed at a seven-year treasury rate of 2%. The borrowing allowance is between $150,000 and $2.5 million. The loans can be used to pay for working capital expenses, machinery and equipment expenses, real estate acquisition (not real estate investment), and tenant improvements.

EDGE Grant

The Encouraging Development, Growth & Expansion (EDGE) Grant program gives qualified Delaware companies an edge by providing access to significant financial capital.

Under the program, STEM-based small businesses can receive up to $100,000 to be spent on eligible expenses. On the other hand, Entrepreneur Class (non-STEM) companies can receive up to $50,000. The grant funds are provided as a 3-to-1 state-to-business match and must be used to expand a business’s sustainability and viability.

Some of the eligibility expenses include:

• Advertising assistance
• Market analysis assistance
• Essential equipment
• Building infrastructure/cosmetic enhancements
• Website design
• Rent assistance for lab space

Delaware Site Readiness Fund

The Delaware Site Readiness Fund was established to promote economic stability and growth within the state of Delaware. The Fund does so by investing in the improvement and development of commercial and industrial sites in order to attract job-creating businesses.

The Site Readiness Fund provides loans, grants, and other forms of financial assistance to local governments and qualified small businesses that invest in renovating, construction, or improving infrastructure for sites that will expand or attract new businesses within the state.

How to Prepare for a Delaware Small Business Loan

To obtain a small business loan in Delaware, you’ll need to prepare various documents. The type of documents you require, may vary according to the loan you are applying for.

If you follow the steps listed below, you’ll have a greater chance of obtaining a loan:

1. Improve your credit score - your credit score will often determine the amount of interest you will pay. A higher credit score will often mean lower interest rates and higher loan payments.
2. Register your business - registering your business notifies the lenders of your business's legitimacy. Registering your business will also connect you to the state of Delaware so you can be notified of grant possibilities.
3. Create a business plan - if your small business is a startup, you must create a business plan. A business plan will explain how your business will grow and what you’d be using your loan for. Banks and lenders often look at business plans to see how safe their investments are.
4. Obtain all legal documentation - this paperwork may show your business's status and is often requested to prove the legitimacy of your business. It’s crucial to show your balance sheets when applying for a loan because lenders are interested in seeing how you earn revenue.
5. Opening a business checking account - generally speaking, if you show that you have existing lines of credit - either at the place you are trying to get a loan from or elsewhere - it shows that your business is accountable for its debts and keeps track of their expenses.

The Bottom Line

Delaware has a great range of small business loan options and also has a proven track record of being a state that supports small business owners. There’s a lot to consider when choosing a lender to go with. Each loan option has its own advantages and pitfalls. When deciding which loan to apply for, you should consider the type of business you plan to run and how you plan to grow your business.