Finimpact

Iowa Small Business Loans

Without a doubt, starting and growing your own business comes with a significant financial investment. Luckily, a variety of Iowa small business loans and grants are available to assist state-based entrepreneurs in starting and expanding their small businesses. Nonetheless, finding the right...

Iowa
Tetiana Sitiugina-Babiuk
Financial Sector Specialist and Content Strategist

Iowa, the midwest hub of agriculture, has diversified its economy into the fields of manufacturing, insurance, technology, and biotech. It boasts a low cost of living, and the potential employee’s education level ranks in the top 10% of states. With over 260,000 small businesses in Iowa and a loan start-up average of $47,480, there’s ample opportunity to launch and fund your new venture through Iowa small business loans in the Hawkeye state.

Top Five Iowa Small Business Loan Options

You can become a small business owner in Iowa by exploring the best funding solutions below.

Iowa Targeted Small Business Program

The Iowa Targeted Small Business (TSB) Program administered by the nonprofit Iowa Center for Economic Success lends funds to new businesses owned 51% by minorities, women, disabled veterans, and people with disabilities. The loan amount reaches up to $50,000 with a five-year repayment period and a maximum rate of 10%

To qualify, you must be a for-profit business located in Iowa with an annual gross income of under $4 million. You can apply on the Center for Economic Success website.

Iowa Linked Investments for Tomorrow Program (LIFT)

Iowa’s state treasurer oversees this program, which offers loans to Iowa-owned and operated businesses. Half of the funds are set aside for underserved populations, while the remaining funds are set aside for Iowa-based new businesses.

These for-profit ventures must be located \in Iowa, and the borrowers can’t exceed a combined personal net worth of $975,000. Business owners must also follow the law in relation to child support or any other state payments. Existing small businesses must have yearly sales of up to $2 million.

The funds can’t be used for refinancing existing loans or real estate investment. The maximum loan amount is $200,000 with interest rates no higher than 4% above the bank’s certificate of deposit yield rates. Payment terms are up to 5 years. The funds are made available through local banks and direct lenders. Contact the state treasurer’s office to review prospective lenders.

Iowa Innovation Acceleration Fund

Run by the Iowa Economic Development Authority (IEDA), this fund encourages tech companies to make Iowa their home. Eligibility requirements include creating and retaining sustainable high-paying jobs, increasing research and capital investment, and having less than 500 employees. The company must create a successful intellectual property licensing or research relationship with an Iowa university or similar research institution and strengthen one or more of the state’s targeted innovation clusters.

Up to $500,000 or 50% of the project cost are available in the form of a secured, low-interest loan. The funds can be used to hire key services or personnel, to facilitate construction costs, or for the purchase of equipment.

Iowa High-Quality Jobs Program

Another IEDA funding option lets eligible businesses offset a portion of their building, expansion, or improvement costs. Financial assistance packages can take the form of loans and forgivable loans (like grants), tax credits, exemptions, and refunds.

You must apply before your business begins its construction, enlargement, or improvements. Employee wages should meet state requirements, and owners must provide benefit plans to all full-time workers, including 70% of medical premiums for singles, 60% for families, some medical or dental coverage, and more.

Award amounts vary based on the needs of the owner, the amount of funding availability via alternative sources, how many high-income jobs the projects will potentially create, and the total overall local impact.

Iowa Self-Employment Program

This grant program managed by the Iowa Department of Vocational Rehabilitation Services (IVRS) assists disabled business owners. It helps them become financially independent while establishing, growing, or purchasing a small business. To qualify, the Iowa for-profit company must be partially owned by someone with a disability.

IVSR will match your investment dollar-for-dollar - up to $10,000. You can use this money to purchase equipment, advertise, and/or buy inventory or services (such as web design, accounting, or legal fees).

Institution Type of Loan Rates Terms Amounts
Iowa Small Targeted Business Program New or existing business Up to 10% Up to 5 years Up to $50,000
Iowa Linked Investments for Tomorrow Program New or existing business Up to but not exceeding 4% above the certificate of deposit rate Up to 5 years $200,000
Iowa Innovation Acceleration Fund Business loans, royalties Not specified Not specified Up to $500,000 or 50% of the project cost
Iowa High-Quality Jobs Program Loans, forgivable loans, tax credits, exemptions, and refunds Not specified Ongoing Not specified
Iowa Self Employment Program Grants Matching funds Up to 6 months Up to $10,000

Top Online Iowa Small Business Loans

When receiving financing from a traditional lender is not an option due to strict qualification criteria, many business owners turn to online business loans that are available nationwide.

1. Blue Vine

BlueVine offers unsecured lines of credit, which makes it a viable alternative to conventional lenders, such as banks and credit unions. A small business loan from BlueVine can be a great option for Iowa-based small businesses that do not yet have excellent credit, as the application won’t harm your credit score any further. It is worth noting that BlueVine lines of credit are only available to small businesses in certain industries and within certain states. Some non-eligible industries include: auto sales, gambling, political campaigns, financial institutions, and nonprofits.

Pros
Quick and simple application process
Quick funds disbursement
Competitive interest rates
Person-to-person customer support
Cons
Funds not available in North and South Dakota
Repayments can be high
High rates for low credit score applicants
Services only available for B2B companies


BlueVine lines of credit do not require a collateral; however, this means that you need to have a slightly higher credit score to qualify. As such, you need to have a FICO score of at least 600, be in business for 6 months or longer and make no less than $10,000 in monthly revenue.

The business lines of credit are available for terms ranging between 6 and 12 months, with weekly or monthly repayment periods. The pre-authorized amount can range anywhere between $5,000 and $250,000, and the rates can be as low as 4.8%.

The Bottom Line

If you are looking to obtain an Iowa small business loan, BlueVine is a great alternative lender to consider. Their attractive interest rates and an easy application process are ideal for entrepreneurs who are just starting out.

2. Fundera

Fundera operates not only as a direct lender, but also as a loan marketplace. This means that you, as a customer, can take advantage of a variety of flexible lending products and services.

Pros
Flexibility with loan types
Competitive rates starting at 6%
Connections to multiple lenders
Soft credit check upon application
Cons
Funding can get up to 3 weeks
Unclear qualification requirements


The eight types of loans offered by Fundera include:

  • Term loans
  • SBA loans
  • Business lines of credit
  • Invoice factoring
  • Equipment financing
  • Microloans
  • Merchant cash advances
  • Commercial real estate loans

One of the biggest advantages of working with Fundera is its unparalleled flexibility in terms of loan products and corresponding terms, rates, and borrowing amounts. Because Fundera connects with multiple lenders across the country, it is able to offer virtually any loan product an Iowa small business may wish for.

Depending on the type of loan, the interest rates can be either incredibly affordable or rather high. Some of the more expensive loan products are term loans, with interest rates reaching 30%, and equipment financing loans, with interest rates as high as 40%. However, you may still benefit from these forms of financing if you are able to repay the loan quickly

The Bottom Line

If you are looking for an alternative lender offering small business loans in Iowa, Fundera is a great option to keep in mind. While the loan products from Fundera can get expensive, you will be able to save significant amounts of money if you are able to repay the loan prior to its scheduled term.

3. Fundbox

Since 2013, Fundbox has been issuing fast and easy small business loans to entrepreneurs within Iowa and beyond. At this time, Fundbox offers only two main products: term loans and business lines of credit. With a term loan, you receive a single lump sum of money, which you would have to pay back over a predefined period of time. Lines of credit, on the other hand, present a revolving, short-term form of funding. This means that you will have access to funding at all times, paying interest only on the open balance. After you repay the loan, the available funds replenish.

Pros
Short application process
Quick fund disbursement
Low minimum credit score requirement (600)
No additional fees apart from interest rate
No monthly minimums
Payments can be automatically debited
Cons
High interest rates
Relatively small credit limit


In general, small business loans from Fundbox have lower limits and shorter terms than some of the similar products on the market. For example, their business term loans can range between $1,000 and $150,000 in value, with either a 24- or 52-week repayment term. The funds must be repaid on a weekly basis, and the overall APR can reach approximately 18%.

Lines of credit are shorter-term, with terms ranging between 12 and 24 weeks. The credit line limit can reach between $1,000 and $150,000 and must be repaid weekly. The total APR for lines of credit can reach 20%.

The Bottom Line

While the loan limits and terms offered by Fundbox might not be too flexible, you can benefit from a quick, automated loan application process with minimum documentation requirements. In addition, if you become the lender’s repeat client, you will be rewarded with lower interest rates and larger loan amounts.

4.Credibly

Over the past decade, Credibly has offered a variety of short term business loans for small businesses in every state across the country. Business owners can choose between different kinds of small business loans, including business lines of credit, merchant cash advances, working capital loans, equipment financing, or invoice factoring loans. Credibly also offers SBA loans, which come with lower down payment requirements and more attractive rates and terms.

Pros
Credit score requirements are low
A variety of loan options available
Borrowing limits are high
Open to high-risk industries
A simple and quick online application process
24/7 customer support
No hidden fees
Cons
Borrowing costs can get expensive
Origination fees are charged
Short repayment terms (daily or weekly)


Credibly aims to provide its financing to a broad customer base, including a variety of industries, as well as small businesses and large corporations alike. The lender's eligibility requirements aren't overly stringent: for most loan options, a minimum credit score of 500 is required.

Loan amounts, fees, and terms may depend upon the type of loan you apply for. Popular working capital loans, for example, have a loan amount of up to $400,000 and a repayment term of 6 to 18 months. Long-term business expansion loans, on the other hand, can amount up to $5,000,000 and must be repaid over a period of three to ten years.

The Bottom Line

Credibly is an outstanding online lender to consider when looking for an Iowa small business loan. You will be able to obtain the necessary business funding in a timely manner thanks to the lender's quick online application process and lenient eligibility requirements.

Other Resources for Iowa Small Businesses

The state of Iowa provides business owners in Iowa with additional resources, including:

  • Assistance with adhering to legal requirements and state licensure
  • Assistance with securing federal funding
  • Advice for women or minority-owned businesses

We’ve listed a select few of these additional resources below:

IA Source Link

IA Source Link is the go-to resource for small business owners who need assistance with starting, growing, and accelerating their Iowa-based business. The resource provides many invaluable services:

  • Resource Navigator - can be used to connect entrepreneurs to nonprofits that provide services to help small businesses
  • Business Concierge - provides personalized help and business referrals
  • Business License Information Center - offers information about business licenses, permits, and regulatory information
  • Downtown Resource Center and Main Street Iowa - provides information about IEDA’s downtown development programs
  • BioConnect Iowa

    IEDA has delegated the delivery of the Small Business Technology Transfer (STTR) Outreach Program and the Small Business Innovation Research (SBIR) program to BioConnect Iowa.

    With the help of BioConnect, Iowa-based companies can receive the much-needed support with applications for federal small business grant programs. This program also helps entrepreneurs to:

    • Review their ideas
    • Apply for grant applications
    • Submit proposals
    • Find available matching funds

    Business License Information Center

    Iowa doesn’t have a general business license, but it offers an online license database that helps business owners find out what licenses they need for their specific business.

    Licensing and other compliance requirements largely depend on the nature of business you are doing. You can visit the Business License Information Center for more information on the legal requirements for Iowa businesses.

    Iowa State University Enterprise Development

    Iowa State University Enterprise Development office supports start-ups and small businesses around Iowa with a broad range of services, including business feasibility studies for startups and new product development, business plan development and analysis, and free entrepreneurship training.

    The entrepreneurship training program LaunchU covers 11 of the most important topics relevant to running a successful business: Communications, Feasibility Research, Products and Services, Market Analysis, Price and Profitability, Legal Structures, and Feasibility - Business Plan Document.

    The Bottom Line

    We’ve examined the top five Iowa small business loans to prepare you for business ownership in the Hawkeye state. IA Source Link and state universities offer complementary services like networking, loan application assistance, and small business development offices.

    We also explored both conventional loan and grant programs and online funding sources like Fundera, so that you can find the right loan for your needs. Our preparation and application tips will help secure capital to fund, grow, or purchase a business.

    With an Iowa small business loan, you can create your own schedule and mentor others, while giving back to your community and providing a secure future for your children. The state of Iowa is open and ready for business. Don’t delay, apply today!

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    About the Author

    Tetiana Sitiugina-Babiuk

    Tetiana Sitiugina-Babiuk

    Financial Sector Specialist and Content Strategist

    Independent writer, content strategist, and financial sector specialist. Tatiana has an extensive experience in working with financial institutions such as Bank of Canada and Risk Management unit at FinDev Canada. She holds an MA in Financial Risk Management from the University of Toronto.

    More about me