Delaware County's revolving loan fund is open for business.
The fund's board is accepting applications for low-interest loans through this new initiative of the county's economic-recovery advisory team, created by Delaware County commissioners and intended to lend a hand to the county's small businesses in the wake of the COVID-19 coronavirus pandemic.
"The commissioners have a responsibility to the fiscal health of the county," commissioner Gary Merrell said in May, when commissioners agreed to fund the loan program. "We have to think about how to fulfill that responsibility. This is an opportunity to do that."
The program, led by Delaware County Finance Authority member Don Rankey on behalf of the team, has secured more than $3.25 million in funding from local governments, including commissioners and Liberty and Orange townships.
As of ThisWeek's press time June 15, the fund still was awaiting a decision on a matching grant from JobsOhio, a statewide economic-development agency.
Delaware County economic development director Bob Lamb, who is overseeing the county's Economic Recovery Advisory Team, of which the revolving-loan fund is one initiative, said some private entities also are considering contributing to the fund but didn't specify which ones.
Links to loan-application materials are available on the county's and townships' websites and the Delaware County Finance Authority.
According to Columbus-based Council of Development Finance Agencies, a revolving-loan fund is a gap-financing measure primarily used for development and expansion of small businesses. It is a self-replenishing pool of money, using interest and principal payments on old loans to issue new ones. Establishing a revolving-loan fund provides access to a flexible source of capital that can be used in combination with more conventional sources, according to the national agency. Often, the fund is a bridge between the amount the borrower can obtain on the private market and the amount needed to start or sustain a business. For example, a borrower may obtain 60% to 80% of project financing from other sources, according to the agency.
The loans may be in the range of $10,000 to $25,000 and may be used to cover up to four months of rent, mortgage and/or utilities payments, Rankey said, allowing businesses to allocate other money toward staffing and inventory.
The loan terms would extend five years at an interest rate no higher than 4% and an initial rate of 3%. First payments also could be deferred up to six months.
Buckeye State Bank will manage the program, Rankey said, with both the bank and revolving loan fund board having separate mechanisms to score applicants.
"Buckeye State will review and score applications and then send them to (the board) to undergo a similar review and scoring process," Rankey said, adding that applications will be processed as they are received on a first-come, first-reviewed basis.
Businesses that aren't in the participating jurisdictions are eligible to apply, Rankey said, although the scoring mechanism benefits those that are in partner jurisdictions.
The cities of Delaware and Powell were approached regarding financial participation in the fund, Rankey said.
During its June 8 meeting, Delaware City Council opted instead to create its own loan fund for businesses within the city. Powell continues to consider next steps.
"We appreciate the city of Powell being considered as a part of Delaware County's revolving-loan-fund program" said Powell Mayor Frank Bertone. "The city of Powell recognizes its small businesses and their impact on the local economy and the need to provide support, ensuring their long-term solvency. We are continuing to research how to responsibly accommodate this innovative use of public funds."