§ 5046 Legislative intent.
The General Assembly finds that small businesses in the State are of vital significance to Delaware's economic well-being and that small businesses provide the vast majority of jobs in the State. The General Assembly also finds that small businesses have a difficult time borrowing needed funds on a conventional basis due to the high cost of these funds and the reluctance of banks to provide 100 percent financing. To help allay these obstacles, the General Assembly hereby directs the Delaware Economic Development Office to use the Small Business Revolving Loan and Credit Enhancement Fund to assist small businesses in reducing the cost of loan funds by offering partial, low-cost loans or by purchasing credit enhancements for small business' sustenance and growth.
§ 5047 Creation of the Fund.
(a) A special fund to be known as the "Small Business Revolving Loan and Credit Enhancement Fund," hereinafter referred to as the "Fund" shall be created and administered by The Delaware Economic Development Authority, hereinafter referred to as the "Authority."
(b) The Fund shall be invested by the State Treasurer in securities consistent with the policies established by the Cash Management Policy Board. All interest on the Fund's moneys and any repayment of loans shall be deposited in the Fund.
(c) Loans made by the Authority to small businesses under the Fund shall be loaned at a below-market rate.
§ 5048 Fund purposes.
(a) The moneys appropriated to the Fund may be used by the Authority for loans up to 25 percent of the total debt required, but not to exceed $100,000 for working capital and fixed asset purposes.
(b) The moneys appropriated to the Fund may also be used to purchase credit enhancements on behalf of targeted businesses which shall support loans made by and/or through financial institutions to such targeted businesses. Credit enhancements purchased shall not exceed $100,000 and the credit enhancement amount purchased shall be determined by the Authority.
(c) The moneys appropriated to the Fund shall not be used for the following purposes:
(2) Restaurants and professional office buildings except in those targeted census tracts, defined in § 2020(1)d. of Title 30;
(3) Projects which do not attract or retain employment opportunities;
(4) Private, nonprofit activities; and
(5) Private or public speculative real estate ventures.
§ 5049 Fund eligibility.
In order for a project to be eligible for the Fund purposes cited in § 5048 of this title, the project must meet the following criteria:
(1) For the purpose of administering the Fund, a small business shall be defined as a firm having a full-time equivalent complement of 100 or fewer Delaware based employees at the time of application;
(2) The firm to benefit from Fund proceeds must create or retain direct, permanent, quality, full-time jobs;
(3) The firm eligible for Fund proceeds must be eligible for and have received commitments for at least 75 percent of the debt amount needed;
(4) The firm eligible for Fund proceeds must be able to collateralize the Fund proceeds to the satisfaction of the Authority which shall use to the greatest extent possible bank like underwriting procedures;
(5) The firm eligible for Fund proceeds must be able to repay the Fund proceeds within a time period and at an interest rate determined by the Authority; and
(6) Projects to be aided by the Fund shall be recommended by the Council on Development Finance ("Council") and approved by the Chairperson of the Authority. No project shall receive any benefit from the Fund unless such benefit is approved by a majority of the Council.