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.
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’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.
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.
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.
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.