When you want to convert your idea into a small business or a startup, there are several processes you will have to go through to make the idea a success.
One of the essential aspects of any new business is funding, which helps you to manage its initial formation costs and the short-term operational and sustenance costs.
Small business grants in Delaware is just the type of funding that helps small businesses manage various cost objectives including that of setting up the venture.
In this blog post, we’ll look into the different types of Delaware small business grants, application processes, and valuable resources.
Why Small Businesses Prefer Delaware
1. Tax benefits for small businesses
One of the top benefits apart from a Delaware startup grant is the tax benefits that companies can derive. The state doesn’t tax business entities that operate outside of its borders.
This means that if there is no physical office in the state if you are not doing business directly within Delaware then state taxes will not be applicable.
Additionally, businesses can also benefit from the following:
- There is no state sales tax
- There is a very low gross receipts tax applicable only in certain situations. This tax will be applicable if you are doing business in the state.
- There is no corporate tax applicable on interest or any other investment income in a Delaware holding company.
- There are no state level taxes on equity investment or fixed-income gains
- There is no business or personal property tax.
- You may have to file estate tax at the county level and it is fairly low
- There is no inventory tax, use tax, or value-added tax in the state
- There is no tax on capital shares or stock transfer and is considered to be beneficial for startups trying to obtain Delaware startup grant or venture funding
- There are no state based taxes on intangible assets like patents, trademarks, and naming rights.
2. Business friendly judicial system
One of the salient aspects of new business formation in Delaware is the highly respected and well-established judicial system also known as Delaware’s Court of Chancery. The court specializes in handling and resolving a variety of corporate issues by using judges instead of a jury.
It also examines issues related to commercial litigation and real property. It is also a known fact that the Delaware business laws are more favorable to business entities as compared to most other states.
If you plan to register in Delaware then you can be rest assured that there is a robust legal system that will provide the protection your business requires.
3. Privacy and flexibility
One of the top advantages for companies in Delaware is the privacy and flexibility that they can enjoy. Business corporations can take advantage of the terms of Delaware’s corporate statutes.
That imply that there is flexibility regarding the structure of your corporation as well as board members like shareholders or directors of the company are not required to be residents of the state.
Since, corporations are not required to disclose the name of the director or officer in the registration documents, such businesses enjoy a lot of privacy as well.
4. Small business development and incentive programs
Whatever the type of business you form in Delaware, there are several state-based business incentive programs you can benefit from. These programs include:
- Tax credit programs
- Angel investor tax credit programs
- Small business grants Delaware programs including the EDGE grant in Delaware.
There are several other programs like the:
- Brownfield Assistance Program
- Workforce Training Grant
- Delaware Capital Access Program
- Delaware Technical Innovation Program
- New Business Facility Corporate Income Credit Program
- Research and Development Tax Credit
- Delaware New Jobs Infrastructure Fund
Delaware Small Business Grants
1. EDGE Grants
As a business, you may qualify for a variety of small business grants and one of them is the EDGE grant in Delaware. The EDGE grants are awarded by the Division of Small Business using a competitive selection process.
The eligibility for this grant depends on the following:
- The said business has been operational for less than 5 years
- The business has employed less than 10 people
- It is located in Delaware
- It has never received a Strat Fund grant
The EDGE Delaware startup grant application takes into consideration several criteria including:
- Location of the business (Opportunity Zones)
- MWVBE (Minority, Women, Veteran-Owned Business Enterprises) status
- Business viability, Business need, and Competitive advantage among others.
A STEM-based company can receive a maximum of $100,000 for eligible expenses through the EDGE grant in Delaware. While an Entrepreneur Class (non-STEM) business can be awarded a maximum of $50,000.
Note: A non-Delaware company may also be able to apply for the EDGE small business grants in Delaware if it relocates a minimum of 51 percent of its business. A sole proprietorship business can also apply for this grant.
2. DE Relief Grants
The Delaware small business relief grants (DE Relief Grants) is a joint effort between the State of Delaware and New Castle County. The goal is to assist small businesses as well as nonprofits that have borne the impact of the COVID-19 pandemic.
The funds of this small business grants in Delaware program are made available from the federal CARES Act. The eligibility rules imply that a business must meet the U.S. Small Business Administration’s definition while a nonprofit is eligible if it is a registered 501(c)(6) or 501(c)(3) organization.
Note: You can apply for the small business grants in Delaware, if 51 percent of your business is based in Delaware. You can also apply even if you have received grants like EDGE grant in Delaware, HELP, or DTIP grants previously. Also, you will be required to apply for this grant online when the funding period opens.
3. Ontrac Entrepreneurship Assistance
Another initiative from the Delaware Division of Small Business is the Ontrac Entrepreneurship Assistance program. This program is designed to nurture early-stage companies as they navigate the complexities of establishing a business in competitive markets. One of Ontrac’s primary objectives is to boost the success rates of startups by equipping them with the necessary tools, guidance, and resources.
Program services:
- Counseling: One-on-one mentorship from seasoned business advisors
- Resources: Access to financial planning tools and market analysis
4. Incentive and credits programs
Although a Delaware startup grant is one of the top beneficial programs for any small business in the state. There are several other types of incentive and credits programs that businesses can benefit from. There is a long list of programs but the most popular and beneficial programs for new and existing small businesses are:
Tax credit programs
Depending on the type of business you form, the location, the product or service offered and the business requirement; there are several different tax credit programs, you may qualify for.
The tax credits are primarily administered by the Delaware Division of Revenue against the personal or corporate income tax, public utility tax, and gross receipts tax, among others.
Some of the top tax credit programs include:
- New Economy Jobs Tax Credit
- New Business Facility Tax Credits
- Public Utility Tax Credit
- Gross Receipts Tax Credit
- Brownfields Credit
- Clean Energy Technology Device Manufacturers’ Credit
- Angel Investor Job Creation and Innovation Tax Credit
- Business Finder’s Fee Tax Credit
- Research and Development Tax Credits
- Neighborhood Assistance Tax Credit
- Individuals with Disabilities Tax Credit
Funds and grant programs
The funds and grants programs are an essential component of the business incentive program in Delaware. The objective is to ensure the startups or small businesses costs of business formation and operation is minimized.
There are several different types of Delaware startup grant and funding programs that you can choose from. Including the Delaware division of small business relief grants. The programs are:
- Transportation Infrastructure Investment Fund(TIIF)
- Delaware New Jobs Infrastructure Fund
- Workforce Training Grant Application
Other Small Business Grants in Delaware
Small business grants in Delaware are not just offered by government bodies and state agencies but also by private institutions and county or local agencies. The state of Delaware has created funding opportunities for small businesses as well as existing businesses based on business need and the impact of the covid pandemic on businesses.
Some of the statewide and local county based funding opportunities are:
- Fund for Women
- Youth Success Grants
- Leadership in Community focus grant
- Highmark BCBSD BluePrints for the Community Small Grants
- Highmark BCBSD BluePrints for the Community Standard Grants
- Capital Project Grants
- COVID-19 Strategic Response Fund: Community Needs Grants
- African American Empowerment Fund of Delaware
- The Next Generation – Northern Delaware
- Caesar Rodney Rotary Foundation (CRRF) New Castle County Youth Empowerment Fund
- Specific Interest Grants
- Potter Charitable Trust
- Delaware Nonprofit Support Fund (CARES)
Embedded Support Programs in Delaware
Embedded support programs within Delaware focus on nurturing small businesses through stages of development from ideation to market entry. This ecosystem includes both incubation and acceleration efforts, facilitated by a network seeking to amplify growth in key industries such as Energy and Bioscience.
Delaware Incubation Programs
Delaware’s incubation programs are designed to support entrepreneurs as they navigate the early challenges of business development. Programs offer essential services such as office space, mentoring, and access to a network of peers and advisors.
A crucial component within this sphere is Seed Capital, which helps start-ups cover initial costs. The Delaware Access program serves as a bridge, empowering emerging businesses until they are investment-ready.
Accelerator Programs
Delaware’s Accelerator Programs focus on spurring small business growth by offering intensive, short-term assistance aimed at rapid expansion. A blend of educational components, mentorship, and Early Stage VC Program offerings prepares firms for venture capital opportunities.
Industries such as Energy and Bioscience find specific accelerator modules tailored to address field-specific challenges and opportunities, fostering a journey from concept to commercialization.
Frequently Asked Questions
Who provides small business grants in Delaware
Local and state government agencies offer a variety of small business grants in Delaware. You can compare small business grants in Delaware with similar programs in other states, such as:
- Small Business Grants Michigan
- Illinois Small Business Grants
- Small Business Grants Ohio
- Colorado Small Business Grants
- Small Business Grants Arizona
- Indiana Small Business Grants
- Small Business Grants Texas
- Wisconsin Small Business Grants
- Wyoming Small Business Grants
- Alabama Small Business Grants
- Louisiana Small Business Grants
- Alaska Small Business Grants
- Connecticut Small Business Grants
What types of small business grants are available in Delaware?
Delaware administers several grant programs to support small businesses, with initiatives like the State Small Business Credit Initiative providing financial aid. Funding opportunities are also available that stimulate economic growth and address revenue losses due to disruptions such as the COVID-19 pandemic.
How can startups access funding programs in Delaware?
Startups in Delaware can access funding through programs such as the EDGE Grant, which supports early-stage businesses. These grants are competitive and require a detailed application demonstrating the potential for growth and economic impact.
Are there specific grant programs in Delaware aimed at nonprofit organizations?
While this FAQ focuses on small business funding, there are financial assistance programs available for nonprofit organizations in Delaware. These vary from grants to subsidies and may have different eligibility criteria.
What financial assistance options are available for women-owned businesses in Delaware?
Women-owned businesses in Delaware have access to a variety of funding sources, including special loan programs, grants, and financial incentives designed to support underserved business owners. These resources aim to help women entrepreneurs start, maintain, and expand their businesses.
How can small businesses apply for the Delaware Grant in-Aid?
Small businesses can apply for the Delaware Grant in-Aid through a formal application process. Applicants typically must furnish business details, financial statements, and a description of how the funding will be used in order to be considered.
Where can I find information on the Delaware Division of Small Business support services?
Information on support services provided by the Delaware Division of Small Business, including mentoring, financial assistance, and business development, can be found on their official website or through contacting the division directly. They offer a range of services tailored to the needs of Delaware’s business community.
This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.
References:
