Delaware Electric Cooperative (DEEC) and Community Care Cooperative Bank (CCBC) are the latest businesses to sign on to an electric cooperative loan program, which could eventually help them grow and expand.
The loan program will be available to a number of entities including: electric cooperatives, community care cooperatives and businesses that operate on a farm, as well as small-scale electric utility companies, such as local gas companies, solar companies, and power plants.
“We’ve heard from people who are looking to build their businesses, and we’re pleased that the DEEC and CCBC are taking the lead on these programs,” DEEC Chairman Tom Bicknell said.
“The programs will help provide opportunities for business owners to grow their businesses while helping to build communities and reduce COVID-19 transmission costs.”
As a public-private partnership, the DEES loan program is an important first step in ensuring that businesses are supported in their efforts to grow and thrive.
“It gives us the chance to be a leader in helping businesses that are not as well-funded as they should be,” Bickell said.
The DEES program has been in the works for a number years and has seen tremendous success.
In January, Delaware Governor Tom Wolf signed an executive order directing the state to establish the DEESS program and to help local communities meet the needs of those who are struggling to stay afloat.
The plan includes establishing a dedicated fund to be used to finance a variety of projects that could benefit the community, such an investment in a community center or a playground.
DEESS also wants to be part of the solution to help people transition from coal to clean energy and to develop new business models.
Bicknell and DEES officials say the loan program could help these communities become more self-sufficient and more profitable.
“This is a very big deal for us, because it means that we’re going to have more and more options for entrepreneurs to build businesses that serve our people and our community,” Bicky said.
For the DEEs loan program to work, the cooperative owners must be certified as a cooperative by the DEELS Cooperative Loan Board, and the business must meet certain standards such as a 10-year operating history and maintaining at least one business with at least $10 million in annual revenue.
This means the cooperative must have at least five full-time employees, and it must maintain at least 5,000 square feet of business space.
The cooperative must be able to pay off the loan and maintain its operating revenue at least three times annually, and must have an annual surplus of at least 25% of its annual revenue, or about $1 million, the amount needed to pay for the loan.
The cooperative must also have a history of success, as demonstrated by the number of customers and the average number of business days it has opened in a year.
If the cooperative doesn’t have the right business model or has failed to meet those standards, the loan may be canceled and the loan would go toward paying off the balance of the loan, according to the DEEL’s website.
The loan program can also provide a way for the cooperative to get its loan backed if it’s unable to pay it back, but it doesn’t require the cooperative owner to make any financial contributions to the loan fund.
The company that is selected to be the primary borrower in the loan is eligible for the program if the business is owned and operated by a Delaware resident.
The business owner can apply for the DEE loan program at a cost of $100,000.
Once the business has been approved, the company must apply for a second loan through a different entity.
The other entity will then have to apply for DEEL approval to join the cooperative.
The program can be used by any Delaware resident who has a cooperative business.
Companies that qualify can also apply for loans through the DEEMIS Cooperative Loan Fund, which is administered by the Delaware Department of Economic and Community Development.
Companies may also use the DEETIS Loan Fund to pay down debt, according the DEEWIS website.
“The loan is an incentive to encourage more cooperatives to come in,” Bicks said.
The DEELS cooperative loan is just one example of how the cooperative loan initiative is a positive move that helps the state’s economy.
“In our state, we have about 300 cooperatives operating.
So this is one way to help our community become more competitive,” Bicking said.