Iowa Small Business loans of up to $50,000 now available

The Iowa Legislature created the Iowa Small Business Loan program earlier this year, and set aside $5 million. The aim is to create and keep jobs in Iowa’s recession-damaged economy by providing financing to eligible small businesses.

- by Jennifer Jacobs (with some editing from Ed Raber)

To be eligible for the Iowa Small Business Loan program, the small business or entrepreneur must:

• be located in Iowa
• be owned, operated, and actively managed by an Iowa resident
• have 35 or fewer full-time equivalent employees
• have a business plan and receive assistance from an Iowa Small Business Development Center or another qualified public or nonprofit business consultant approved by the Iowa Department of Economic Development
• not be in violation of environmental, worker safety, and labor regulations
• employ only people legally authorized to work in Iowa
• not engage in the production, depiction, or distribution of obscene material
• not be in bankruptcy and not be imminently contemplating filing for bankruptcy.

Entrepreneurs and small business owners can apply for a loan of between $2,500 to $50,000 at an interest rate of 3.9 percent. The interest rate drops to 2 percent if the state loan is combined with financing from a local lender who finances at least one third of the total loan package amount.

Iowans must use the loan money to:

• upgrade or modernize equipment
• improve efficiencies in their supply chains
• improve their distribution and transportation margins
• reduce facility costs through increased energy efficiency
• leverage other sources of business financing.

To confirm eligibility and to start a loan application, businesses should contact their local Small Business Development Center. In the Washington County area, that is Paul Heath and Tom Pickering at the University of Iowa SBDC, (319) 335-3742.


Interested businesses and entrepreneurs can also contact Ed Raber at the Washington Economic Development Group at (319) 653-3942 or wedg@iowatelecom.net to get started.

The Iowa Department of Economic Development has contracted with the Iowa Foundation for Microenterprise and Community Vitality to assist with the credit review process and provide recommendations regarding loan decisions. The Department of Economic Development will make final decisions on which loan applications are approved.

Culver said in the news release: “I am pleased to announce the launch of the Iowa Small Business Loan Program as another resource to support the growth of young companies within the state. These resources will allow them to create new financial opportunities for themselves, their employees and the communities in which they operate. These businesses will create new jobs, make our economy stronger and help move Iowa forward.”

It will take four to six weeks for a decision on an application, according to a news release this morning from Iowa Gov. Chet Culver’s staff.

For more information, go to www.ISBLoan.org, or contact  Jason Yates with the Iowa Foundation for Microenterprise and Community Vitality at (515) 401-8290 or jyates@iowamicroloan.org.