The grants were provided in 2020 as a joint effort between the State and New Castle County to assist Delaware small businesses and nonprofits impacted by the COVID-19 pandemic. The funds for the program were provided through the federal CARES Act.

All grants issued to for-profit businesses must be closed out by December 31, 2021. In order to close out the grant, a business must submit proof of all relevant expenditures along with federal tax returns for calendar year 2020 that show a revenue decrease relative to 2019. If the business does show a profit for the year but can show a 25% decrease in one quarter*, they are still eligible for forgiveness of the grant. Businesses in disproportionately impacted industries who opened after 1/1/20 do not need to show a decrease. The below industries are designated as disproportionately impacted:

Businesses with NAICS code on their 2019 tax returns starting with the following sets of two numbers:

• 44 (Retail Trade)
• 45 (Retail Trade)
• 71 (Arts, Entertainment, & Recreation)
• 72 (Food Services & Drinking Places)

Businesses with NAICS code on their 2019 tax returns starting with the following sets of four numbers:

• 4855 (Charter Bus Industry)
• 6116 (Private Instruction)
• 6212 (Offices of Dentists)
• 6244 (Child Care Services)
• 8121 (Personal Care Services)
• 8129 (Other Personal Services)

If a business does not provide documentation for all eligible expenses or the business made purchases that were not eligible under the grant guidelines, the grant must be paid back to the state with interest applied.

*Businesses who experienced a decrease in revenue must provide a certified letter from a CPA confirming this decrease.

All businesses who received a DE Relief Grant should refer to their grant agreement for a full listing of expenses they were approved for under the grant. Exhibit A of the grant agreement outlines approved expenses for each business.

For most expenses to be considered eligible, they must be incurred between April 1, 2020 and December 31, 2021.

No, you do not need to complete expense reporting unless you have already received and spent your DE Relief Grant funds. If you have not received the funds yet, please do not begin the expense reporting process. You will be notified after you receive your funds with a date when you will be required to report expenses.

Gather the following documents, which you will need to submit as part of your expense reporting:

• 2020 federal tax return for your business. This is required to report expenses. You should only start your application to report expenses when you have your tax return document ready to upload.
• Documentation for qualifying expenses
  • Acceptable forms of documentation include but are not limited to:
    • Receipts
    • Invoices
    • Cancelled checks

The receipts and other documentation that you upload must equal the original grant amount your business was approved for as well as any bonus amount you received. (For example, if your company was approved for $100 for the original grant and you were approved for a $10 bonus, your receipts must total $110.)

All expense reports must be submitted no later than December 31, 2021.

All businesses who received a DE Relief Grant should refer to their grant agreement for a full listing of expenses they were approved for under the grant. Exhibit A of the grant agreement outlines approved expenses for each business.

An eligible expense is an expense the business incurred due to COVID-19 that it would not have expected to incur during the regular course of business. An eligible expense must fall under one of the following categories:

• Equipment Expense
• Technology Expense
• Refinancing Expense
• Advertising Expense
• Accrued Fixed Expense
• Occupying expense, only when the business is in a disproportionately impacted industry.

 For additional information on what expenses are eligible and how to report them correctly, please refer to the In-Depth Q&A on Expense Reporting.

The following broad expense categories are considered ineligible uses of funds, though this list is also not intended to be exhaustive:

• Personnel expenses (direct wages, benefits, etc.).*
• Personal expenses of the business owner(s) or other associated individual(s).
• Payment of taxes or fines to government authorities, except for the payment of property taxes in some cases.
• Legal expenses.*
• Expenses associated with the sale of the business or acquisition of another business.
• Investments made by the business in financial assets.
• Research and development expenses.*
• Minor and major capital improvements unless they can be shown to have been forced upon the business as it attempted to respond to COVID-19.*
• Purchase of gifts, or charitable donations.
• Payments made to an affiliated entity.

*These expenses may have been approved for the use of bonus funds. Refer to your grant agreement for more information or contact a Regional Business Manager for clarification.

DE Relief Grant recipients have until December 31, 2021 to spend bonus funds. As a reminder, the bonus money can be used on valid business expenses, including:

Expense reports will be reviewed in the order in which they are received. Once all documentation is reviewed, the Division of Small Business will be notifying businesses by email if they are approved for relief. Due to the volume of applications, it may take a few weeks for businesses to receive notification.  

The Division of Small Business’s team of Regional Business Managers is available to help companies submit the required expense reporting information. Small businesses can connect with the manager for their part of the state or send an email to business@delaware.gov for assistance.