For a list of Delaware economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
FINANCING & GRANTS
Delaware Strategic Fund (DSF): Businesses that demonstrate potential to create employment opportunities in Delaware are eligible to apply for the DSF, the state’s primary funding source to provide low-interest loans and grants to businesses for job creation, relocation, expansion and Brownfield redevelopment. Financial assistance may be provided in the form of low-interest loans, grants or other creative financial instruments.
Brownfield Assistance Program: Encourages redevelopment of environmentally distressed sites within Delaware by helping reduce capital expenditures. The program is funded through the Delaware Strategic Fund and offers up to $1 million annually in matching funds to assist with investigation and remediation of Brownfield sites. Since the state of Delaware understands the risks are higher for Brownfield projects, it works to provide financial incentives and a fast-track cleanup process.
To be eligible, the owner, prospective owner or developer must obtain a Brownfield Certification through DNREC that recognizes the site as a Brownfield. After obtaining the certification, the owner, prospective owner or developer can send an application for evaluation and processing.
Eligibility for Brownfield assistance is based on the project’s potential to serve a public purpose by maintaining or expanding employment in the state, by maintaining, expanding or diversifying business and industry in the state, and/or by maintaining or increasing the tax base in the state.
Delaware Technical Innovation Program (DTIP): The Delaware Strategic Fund supports business research through funding transition grants that will bring innovative new products, jobs and revenue to Delaware. Companies involved in small business innovation—including research and development firms looking for the next scientific and technological breakthroughs—can apply for grants under the federal Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs as a pathway to receiving DTIP grants. These grants help promote the entrepreneurial spirit in Delaware. In order to be eligible for a DTIP grant, companies must have received a Phase I grant and applied for a Phase II grant.
Delaware Capital Access Program (DCAP): This private-public match program gives banks a flexible, transparent tool to expand small business lending. It is designed to give banks a flexible tool to make business loans that are somewhat riskier than a conventional bank loan, in a manner consistent with safety and soundness. DCAP is designed to use a small amount of public resources to generate a large amount of private bank financing, thus providing access to capital for many Delaware businesses.
When a lending institution makes a loan under the program, the bank/borrower contribute a premium payment to a loan reserve fund. This is a private transaction to be negotiated between the lending institution and the borrower. The Delaware Economic Development Authority (DEDA) then matches the premium payment. DEDA’s matching premium can range from 2.5 to 6.0 times the lender/borrower contribution. The pool of reserves builds as additional loans are enrolled in the program. The lender can withdraw from the reserve in the event of an enrolled loan defaulting. Even after a loan’s maturity, the reserves remain available to the lender for additional loan claims.
State Small Business Credit Initiative (SSBCI): Small businesses in Delaware with fewer than 750 employees are eligible to apply. This loan participation program is designed to enhance access to capital and lower interest rates. Loan proceeds can be used for any business expense—including payroll, inventory, machinery and equipment—and to supplement general working capital needs.
The maximum amount of Delaware Economic Development Authority participation is $1 million. Below-market rates and flexible terms are available, and a five-year term or less is preferred.
Notable uses for lenders include collateral shortfalls, cash-flow mitigation, 504 interim financing, start-up working capital and nonprofit financing.
EDGE Grants: (Encouraging Development, Growth & Expansion): EDGE Grants aim to help level the playing field for Delaware small businesses that compete with large companies. Through a competitive award process, businesses can receive up to $50,000 or $100,000 in matching grants to put toward a wide range of eligible expenses.
Entrepreneur Class companies are eligible for awards of up to $50,000. STEM Class companies are eligible for awards of up to $100,000.
Among other requirements, applicants must:
- Have been in operation less than 5 years
- Have net assets totaling less than $500,000
- Employ 10 people or less
- Have at least 51% of their employees or real estate located in Delaware
- Have not received a Delaware Strategic Fund grant
Grant funds must be used to expand a business’s viability and sustainability, including:
- Market analysis
- Website design
- Building infrastructure/cosmetic enhancements
- Essential equipment
The State of Delaware has adopted a clear, bipartisan policy to attract new business and encourage the expansion of existing operations. Key tax features include:
- No State or local general sales tax.
- No personal property or inventory taxes.
- Real property taxes are among the lowest in the country.
- Property tax relief for new construction and improvements of existing property.
- The exemption of certain investment and holding companies from corporate income tax.
- The adherence of the state tax structure to the federal definition of corporate net income so that companies may take full advantage of any federal tax law change, such as more rapid depreciation of newly purchased assets.
- Port of Wilmington foreign trade zone allows the deferment of import taxes.
Angel Investor Tax Credit: The Angel Investor Job Creation and Innovation Act creates a 25% refundable tax credit for investors who invest at least $10,000 (for individuals) or $30,000 (for funds) in young Delaware-based companies in high-tech fields, including aerospace, fintech and biotech. The program sunsets in 2021 and has an annual cap of $5 million.
Tax-Exempt Bond Financing: New or expanding businesses, governmental units and certain organizations exempt from federal income taxation can be eligible for statewide financial assistance in the form of tax-exempt bonds through the Delaware Economic Development Authority. Tax-exempt financing may be cost-effective for projects involving the issuance of more than $750,000. All applications are reviewed for impact on Delaware’s economy. Eligible projects include the following major categories:
- Qualified 501(c)(3) Bonds: Tax-exempt bonds can be issued for the benefit of organizations that are tax-exempt under Section 501(c)(3) of the Code, if 95% of the net proceeds of the bonds are used by the organization in furtherance of its exempt purpose. Depending on the project being financed, certain other limitations may apply.
- Exempt Facility Bonds: Tax-exempt bonds can be issued to finance certain types of utility projects, including sewage facilities, solid waste disposal facilities, facilities for the local furnishing of electricity and gas, and other types of facilities.
In addition, the Delaware Division of Revenue administers tax credits related to economic development, including:
- New Business Facility Tax Credit
- New Economy Jobs Tax Credit
- Research and Development Tax Credit
- Green Industries/Brownfield Tax Credit
- Land and Historic Resource Conservation Tax Credit
- Historic Preservation Tax Credit
- Neighborhood Assistance Tax Credit
- Business Finder’s Fee Tax Credit
- Vocational Rehabilitation Hiring Tax Credit
Workforce Training Grants: The matching training grant fund is designed for Delaware companies that want to upgrade their employees’ occupational skills. Whether the companies are relocating, existing and/or expanding their business they may qualify. The program has a strong reputation for assisting companies to meet and exceed industry needs for customized, flexible and industry-driven skills training.
The grant is funded through Delaware Unemployment Taxes. A portion of the funds is shared by the Department of Labor to provide Employment & Training services for the unemployed population. The Delaware Economic Development Authority focuses on providing training grants for relocating and existing companies. These funds are available to train entry level employees up to frontline supervisors. All training is industry-specific to meet the needs of the company and its employees. The funds arefor various types of training programs including basic skills, industry skills, pre-employment and on-the-job training. Various methods of training are available including on-line instruction, classroom instruction and hybrid instruction.
For more information on these incentives visit delbiz.com