The Delaware Relief Grants program, announced on Wednesday, August 19th, is an initiative between the State of Delaware and New Castle County, and is funded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program is intended to assist Delaware businesses and nonprofit organizations (DE entities) that have been impacted by COVID-19. The grants will be available in three rounds in September, October and November, with at least $30 million available per round. DE entities can apply for grant amounts between $30,000 and $100,000. The Division of Small Business will begin accepting applications for the first round of funding September 8, 2020.
In order to qualify, DE entities must have at least 51% of their operations physically located in the state of Delaware. Generally, if the entity was eligible for PPP loans it would be eligible for the grant. In addition:
- Businesses must meet the U.S. Small Business Administration’s definition of a small business for your industry.
- Nonprofits must be registered as a 501(c)(6) organization or a disproportionately impacted 501(c)(3).
- At least for the first round of grants, any PPP funding received must be less than $1 million.
The size of the grant will be based on the entity’s 2019 gross revenue.
- For 2019 revenue of $0-$500,000, the grant will allow up to $30,000 in funds.
- For 2019 revenue of $500,000-$1 million, the grant will allow up to $50,000 in funds.
- For 2019 revenue of $1 million-$2.5 million, the grant will allow up to $72,500 in funds.
- For 2019 revenue of over $2.5 million, the grant will allow up to $100,000 in funds.
Delaware Relief Grants are specifically designed to aid entities in efforts directly related to the pandemic response. Things that are allowed to be covered are:
- Purchasing equipment to make a workplace suitable for COVID-19 safety (such as PPE, plexiglass, air purifiers, etc.) Basically anything you purchase to make your business safer or to follow state health guidelines surrounding COVID-19.
- Refinancing of debt incurred due to COVID-19 (including State of Delaware HELP and EID loans).
- Technological enhancements directly related to the pandemic, such as purchasing equipment for staff to work from home.
- Advertising efforts undertaken as a result of COVID-19.
- Fixed expenses the applicant accrued during COVID-19, such as rent that a landlord deferred, or principal and interest payments the entity was allowed to defer. It does NOT include things such as payroll or health insurance.
- If your entity is considered a Disproportionately Impacted Business you may use the grant money for fixed expenses even if they were not deferred. Your entity must fall under one of these NAICS codes, and that code MUST be on your 2019 tax return.
- 44 (Retail Trade)
- 45 (Retail Trade)
- 6166 (Private Instruction)
- 6244 (Child Care Services)
- 71 (Arts, Entertainment, & Recreation)
- 72 (Food Services & Drinking Places)
- 8121 (Personal Care Services)
- 8129 (Other Personal Care Services)
DE entities receiving grants will be required to submit proof of expenditures along with a copy of their 2020 Federal Income Tax Return showing a reduction of at least 7.5% in gross revenue as compared to 2019 revenue. If a decrease is not evident, the grant must be repaid with interest of prime plus 500 basis points.
The entity is not required to take all of the grant money that it qualifies for. If the entity fails to get through the grant process in the first round, it is eligible for future rounds but a new application must be submitted every round.
Applications will be available at the Delaware Division of Small Business starting September 8, 2020 at https://business.delaware.gov/relief.