State of Delaware/New Castle County Launch $100 Million Grant Program for Small Businesses and Nonprofits

Saul Ewing Arnstein & Lehr LLP

Saul Ewing Arnstein & Lehr LLP

Governor John Carney and New Castle County Executive Matt Meyer have announced the launch of the DE Relief Grants Program, a joint initiative of the State and County to assist Delaware’s small businesses and nonprofit organizations which have been impacted by COVID-19. The funds being made available, in the amount of $100 Million, come from the Coronavirus Aid, Relief and Economic Security (CARES) Act as part of more than $300 Million received by New Castle County through the CARES Act.

The DE Relief Grants Program will be administered by the Delaware Division of Small Business. To qualify, the business must meet the U.S. Small Business Administration definition for small business in the specific industry in which they operate. For nonprofit organizations, the entity must be either a 501(c)(3) or a 501(c)(6) organization. In addition, at least 51 percent of the business’s operations must be physically be located in the State of Delaware. An organization is not eligible for a grant under this program if it received funding through the federal Paycheck Protection Program in an amount of $1 million or more, or, for nonprofits, a 501(c)(3) organization that is not in a disproportionately impacted industry as listed below is not eligible.

The following industries listed by NAICS Code are considered to have been disproportionately impacted[1] by COVID-19 and will be given special consideration for funding:

  • NAICS 44 (Retail Trade)
  • NAICS 45 (Retail Trade)
  • NAICS 6116 (Private Instruction)
  • NAICS 6244 (Child Care Services)
  • NAICS 71 (Arts, Entertainment, Recreation)
  • NAICS 72 (Food Services and Drinking Establishments)
  • NAICS 8121 (Personal Care Services)
  • NAICS 8129 (Other Personal Services)

The size of the grant to be given will be based upon the revenues generated by the small business or nonprofit organization in 2019 and breakdown as follows:

  • Revenues of up to $500,000 --- up to $30,000 in grants available (6 percent of 2019 revenues)
  • Revenues of $500,00 to $1 million --- up to $50,000 in grants available ($30,000 + 4 percent of 2019 revenues greater than $500,000)
  • Revenues of $1 million to $2.5 million --- up to $72,500 in grants available ($50,000 + 1.5 percent of 2019 revenues greater than $1 million)
  • Revenues of greater than $2.5 million --- up to $100,000 in grants available ($72,500 + 1 percent of 2019 revenues greater than $2.5 million)

Three (3) rounds of funding will be offered by the DE Relief Grants Program, with the first round in early September, the second round in early October and the third round in early November.

Grant funds can be used for the following:

  • Purchasing equipment to make the workplace suitable for COVID-19 safety (personal protection equipment, plexiglass, air purifiers, etc.)
  • Refinancing of debt incurred due to COVID-19 (including State of Delaware HELP loans)
  • Advertising efforts undertaken as a result of COVID-19
  • Fixed expenses accrued during COVID-19
  • Technological enhancements undertaken to adapt business model for COVID-19

Grants provided under the DE Relief Grants Program must be closed out in 2021. To close out the grant, the business must submit proof of all relevant expenditures, along with federal tax returns for calendar year 2020 that show at least a 7.5 percent revenue decrease relative to 2019.

Additional information concerning the DE Relief Grants Program, including the process for applying for such grants, can be found here.

You can follow the Division of Small Business on Facebook @DelawareSmallBusiness or on Twitter @delbiz.

  1. For purposes of the DE Relief Grants Program, a disproportionately impacted industry is one which had their operations significantly impacted by pandemic containment measures during at least April and May 2020 and also experienced significant job losses from January to May 2020 and/or had an average industry profit margin below 10 percent prior to COVID-19.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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