STATISTICAL OVERVIEW: INCENTIVES
This section includes services provided by the Delaware Economic Development Office, through The Delaware Economic Development Authority, and services available in Delaware from other resources.B
Competitiveness Fund - Citizens Bank & DEDO Program
Technology Based Seed Fund
The State of
Seed capital ranging between $50,000-$100,000 may be available to early stage companies to assist in working capital, development of technology, and operational capital during research and development. Contact the Delaware Economic Development Office for additional information. Companies must become Delaware Based Companies prior to funding. For more information click here. To apply for funding, submit your business plan and the application that can be downloaded here.
Technology Based Seed Fund-Citizens Bank & DEDO program
For more details on the program, contact:
Business Finance Section
Phone:(302) 739-4271
Fax:(302) 739-5749
Delaware Strategic Fund Assistance
Small Business Administration Assistance
Local Governments Complement the Financing Effortsof DEDO
The Delaware Economic Development Authority (DEDA) provides statewide financial assistance to new or expanding businesses, governmental units and certain organizations that are exempt from federal income taxation (collectively, "assisted persons") by issuing tax exempt bonds and lending the proceeds of such bonds to these assisted persons. Tax exempt bonds bear lower interest rates than comparable taxable bonds, because the interest paid to bond holders is exempt from federal and Delaware income taxes. DEDA is able to pass on this lower interest rate to the assisted persons. The tax-exempt bonds that DEDA issues are "revenue bonds"; thus, DEDA pays the principal and interest on such bonds solely out of loan repayments that it receives from assisted persons.
DEDA does not guarantee the payment of principal or interest on the bonds, and the full faith and credit of the State of Delaware does not back them up. Tax exempt financing may be cost effective for projects involving the issuance of more than $750,000.
Application for Tax Exempt Bond Assistance
To begin the process of tax exempt bond financing, an assisted person makes an application to DEDA in which it furnishes information about its business, its history and the proposed project.
DEDA's staff reviews applications for their financial feasibility and their impact on Delaware's economy. If DEDA accepts an assisted person's application after review, the Council on Development Finance holds a public hearing on the proposed project and makes a recommendation to the Chairperson of DEDA. The Chairperson of DEDA must approve an application before DEDA can issue a bond.
Eligible Projects
The availability of tax exempt status for bonds issued to finance a given project is governed by various provisions of the Internal Revenue Code of 1986 (the "Code") and the regulations and administrative rulings (the "Regulations") of the Internal Revenue Service. The Code and Regulations impose numerous, detailed restrictions on the amount of tax exempt bonds a state may issue. These regulations may be issued for a specific project and on the permissible uses of the bond proceeds. These rules are considerably more detailed than the brief descriptions that follow. In general, eligible projects include the following major categories:
1.Qualified 501(c)(3) Bonds.Tax exempt bonds can be issued for the benefit of organizations that are tax exempt underB Section 501(c)(3) of the Code, if 95 percent 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.
2.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.
Sale of Bonds
After approval of a bond issue by the Chairperson of DEDA, the assisted person applying for tax-exempt bond assistance is responsible for arranging for the sale of the bonds.
For further information concerning bond financing, please contact:
The Delaware Economic Development Authority
Attention: Business Finance Section
99 Kings Highway
Dover, Delaware 19901
Phone:(302) 739-4271
Fax:B (302) 739-5749
DELAWARE STRATEGIC FUND ASSISTANCE:
The Delaware Strategic Fund represents the primary funding source used by The Delaware Economic Development Authority to provide customized financial assistance for job retention, creation or other economic development projects within the state. Some specific uses of the fund are listed below:
Development Loans or Grants
Green Industries Loans
Governmental Units Development Assistance
SBIR Bridge Grants
Brownfield Grants
Typically, a request for financial assistance from the Strategic Fund is first discussed with the Business Development Section of the Delaware Economic Development Office. If a project is deemed to qualify under legislative, regulatory, and policy guidelines, a process begins which includes completion of a comprehensive application, staff and legal review of the application, review of the application and other supporting material at a public meeting of the Council on Development Finance, final staff review, approval by the Chairperson of The Delaware Economic Development Authority, followed by a contract that memorializes terms and conditions. Assistance usually includes recapture provisions.
For further information about Strategic Fund assistance, please contact:
The Business Finance Section
Delaware Economic Development Office
99 Kings Highway
Dover, DelawareB 19901
Phone:(302)739-4271
Fax:(302)739-5749
Download Applications
Delaware Strategic Fund Grant Application - Word Document
Delaware Strategic Fund Loan Application - Word Document
Note about Applications: Availability of this form of application online in no way obligates the Delaware Economic Development Office ("DEDO") or The Delaware Economic Development Authority ("DEDA") to accept an application for consideration or to provide any sort of assistance, financial or otherwise, to any person submitting an application. Prior to submitting an application and its attachments for consideration, interested parties should speak with a representative of DEDO regarding the purpose of the application and its required attachments, the project for which funding is desired, and the criteria used by DEDO in selecting projects for funding. The acceptance by DEDO of an application for consideration in no way obligates DEDO or DEDA to approve the application or provide any form of assistance. All applications accepted by DEDO or DEDA will be the subject of a public hearing before the Council on Development Finance. The form, amount and conditions of any funding approved by DEDA will be established by DEDA in accordance with Delaware Strategic Fund Program requirements and DEDA's discretion and will be set forth in an appropriate agreement to be executed by the assisted party and by DEDA.
SMALL BUSINESS ADMINISTRATION ASSISTANCE:
The Delaware Economic Development Office assists small businesses in seeking loans guaranteed by the U. S. Small Business Administration (SBA) under the 7(a) and 504 business loan programs.
Financing programs provided by the SBA vary according to a borrower's financial need. The SBA does not offer grant programs for business start-ups. Borrowers are expected to have a personal financial stake in the business. SBA loans are made by private lenders and are guaranteed up to 85 percent with a maximum guaranty of $1,000,000.
You can use a 7(a) loan to: expand or renovate facilities; purchase machinery, equipment, fixtures and leasehold improvements; finance receivables and augment working capital; refinance existing debt with compelling reason; finance seasonal lines of credit; construct commercial buildings; and/or purchase land or buildings.
The SBA 504 loan program provides long-term, fixed-rate, subordinate mortgage financing for acquisition and/or renovation of capital assets including land, buildings and equipment. The 504 program provides a lower down payment requirement, typically at 10 percent; a fixed rate usually below the market rate; and longer repayment terms, typically 20 years for real estate loans and 10-20 years for heavy equipment loans.
You must pledge sufficient assets, to the extent that they are reasonably available, to adequately secure the loan. Personal guaranties are required from all the principal owners of the business. Liens on personal assets of the principals may be required. However, in most cases a loan will not be declined where insufficient collateral is the only unfavorable factor.
The SBA offers counseling and technical assistance through its partnership with the Small Business Development Centers and the Service Corps of Retired Executives (SCORE). SBA's Business Information Center, located at the Wilmington SBDC office, provides a comprehensive business resource library and computer laboratory for small business owners to conduct research.
The SBA also offers a wide variety of financing and business development programs, including export financing, the Small Business Innovation Research (SBIR) program, disaster financing, venture and angel capital programs, surety bonds, advocacy, and government contracting assistance.
Inquiries concerning SBA's business loan programs may be made through the Delaware Economic Development Office or directly to the SBA at:
Jayne Armstrong, District Director
U.S. Small Business Administration Delaware District Office
824 Market Street, Suite 610
Wilmington, Delaware 19801
Phone:(302)573-6294
Fax:(302)573-6060
The Delaware Access Program is designed to give banks a flexible and extremely non-bureaucratic tool to make business loans that are somewhat riskier than a conventional bank loan, in a manner consistent with safety and soundness.B It is designed to use a small amount of public resources to generate a large amount of private bank financing, thus providing access to bank financing for many Delaware businesses that might otherwise not be able to obtain such access.
The Delaware Access Program is based on a risk-pooling concept.B It is an approach that is fundamentally different from the traditional type of insurance or guarantee program, such as the federal Small Business Administration 7(a) program, which guarantees a percentage of a loan on a loan-by-loan basis.
When a bank makes a loan under the program, the borrower pays a one-time premium charge, which is matched by a bank premium payment.B DEDA then matches the combined total of the borrower's payment and the bank's payment.B The borrower's premium payment is one of the terms of the loan to be worked out as part of the private transaction between the bank and the borrower.B
For more details on the program, contact:
Delaware Economic Development Office
99 Kings Highway
Dover, Delaware 19901
Phone:(302) 739-4271
Fax:(302) 739-5749
or participating banks: PNC Bank, Wilmington Trust
LOCAL GOVERNMENTS COMPLEMENT THE FINANCING EFFORTS OF THE DELAWARE ECONOMIC DEVELOPMENT OFFICE:
City of Wilmington
The City of Wilmington can issue EZ Bonds for projects located within the Community.B These bonds are very similar to the former Industrial/Commercial Revenue Bonds.B Commercial and manufacturing projects are eligible for bond financing in amounts up to $3 million per project.B Further information may be obtained by contacting:
City of Wilmington - Enterprise Community
800 French Street
Wilmington, Delaware 19801
Phone:(302)571-4189
Fax:(302)573-5685
New Castle County
Manufacturing projects located in New Castle County may qualify for financing at tax-exempt rates through the County's Economic Development Revenue Bond Program administered by New Castle County.B The purchasers of the bonds provide the funds for the revenue bond financing.B The County's annual volume limit is $39.4 million.B For more details, please contact:
New Castle County
c/o Ronald A. Morris, Chief Financial Officer
87 Reads Way
Finance Division
New Castle, DE 19720
Sussex County
Sussex County operates an Industrial Revenue Bond program with a cap of $15 million each year for industrial projects in the County.B Project review requires a letter of commitment for placement of the bond before a project recommendation is made by the Industrial Revenue Bond Review Committee to Sussex County Council (political jurisdiction).B The Industrial Revenue Bond process may require as little as five weeks from inception to bond closing.
Additional information may be obtained by contacting:
Sussex County Economic Development Office
Rt. 113 and Rt. 9
South Dupont Hwy.
P.O. Box 589
Georgetown, Delaware 19947
Phone: (302)855-7770
Fax:(302)855-7773
