DE Relief grants see big interest as fund reopens
DOVER – As the second round of the DE Relief grant fund opens at 10 a.m. Thursday, Oct. 1, state officials reported that the first round was largely successful in reaching intended businesses.
The first round opened Sept. 8 and closed 36 hours later. It saw 1,645 requests that totaled more than $54.4 million, reported Damian DeStefano, director of the Delaware Division of Small Business.
“We knew the demand would be really high for these [grants], but it probably even exceeded our expectations on the speed at which the requests came in,” DeStefano told the state’s investment board, the Council on Development Finance (CDF), on Sept. 28.
The $100 million grant program is backed by funds from the federal government and aims to help Delaware businesses cover expenses incurred due to the COVID-19 pandemic. The grants can be used for purchasing equipment to make a workplace suitable for COVID-19 safety, such as personal protective equipment, plexiglass, air purifiers, etc.; refinancing of debt incurred due to COVID-19, including loans from the state’s Hospitality Emergency Loan Program (HELP); advertising efforts undertaken as a result of the pandemic; and fixed expenses accrued during the crisis.
The DE Relief program hoped to reach businesses that have acutely felt the impact of the pandemic’s economic restrictions, including the smallest businesses as well as minority- and women-owned businesses. It largely fulfilled its goal in the first-round applications.
About 75% of applicants came from businesses with annual revenues of less than $1 million and close to 80% came from businesses with fewer than 10 full-time employees. Those small businesses accounted for about 45% of the total dollars requested in the first round – a finding consistent with the fact that grant allocations are based on annual revenues.
The maximum amount that can be requested in the program is $100,000 – which 45 businesses applied for – while the minimum is $15,000. Most of the applicants sought the minimum grant, DeStefano said.
Disproportionately impacted industries totaled more than two-thirds of all the applications, with restaurants and bars leading all with 30% of applicants. Retail stores saw 15% of the applications while personal care services, arts and entertainment, and childcare services saw 7%, 6% and 2%, respectively.
Demographically, the state grant fund was doing well reaching historically under-represented groups. More than half of the applicants were either women- or minority-owned, with 225 being both. Both Black-owned and Asian-American-owned businesses were well-represented in the pool, but Hispanic-owned businesses underperformed compared to their percentage of the state’s businesses. In an effort to better reach that community, DeStefano said his division was working with community partners to spread the word and was hosting bilingual webinars on the program’s provisions.
While the funds were spread out among the state’s three counties, certain areas like the Coastal Sussex County beach towns overperformed. DeStefano said that this office would target marketing efforts in areas that had lower participation, like Western Sussex, which coincidentally is also home to many Hispanic-owned businesses.
Meanwhile, the state’s Hospitality Emergency Loan Program (HELP) has loaned more than $4.6 million to borrowers in disproportionately impacted industries, as of Sept. 25, officials said. In total, 307 businesses have received a HELP loan, including 140 that have returned for more than one month of funds.
That program is only open to businesses bringing in less than $2.5 million in annual revenue and has a $10,000 monthly allocation cap. The funds are not grants, however, and the zero-interest loans must be repaid after a nine-month deferment period.
“We feel it’s been a vital lifeline, especially over the April-May period when many were shut down but then also over the summer when many especially in the beach communities couldn’t really see the level of business they expected,” DeStefano said.
The program’s recipients are weighted toward Sussex County, due in part to the county’s large number of tourism-dependent hospitality businesses that were battered by pandemic’s impact.
Jack Riddle, president and chief lending officer of Community Bank Delaware who also serves on the CDF, said that HELP loans have been “very well-received” by Sussex County business owners.
By Jacob Owens