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Iowa Small Business Loans Turn Dreams Into Reality

Earning a living doing what you love is a dream for many. Yet, often this dream is not realized as people are afraid of the initial financial investment. Iowa small business loans and grants may be the answer for self-starters who want to be their own boss. We’ll explore these options to help you make the best choice for your business venture.

At a glance 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 up to $30,000 with a five-year repayment period for new businesses owned 51% by minorities, women, disabled veterans, and people with disabilities.  To qualify, you must be a for-profit business located in Iowa with an annual gross income of under $4 million.  

Loan rates range from 3% to 5% with fixed monthly payments and no prepayment penalties.  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 entrepreneurs businesses. 

These for-profit ventures must be 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 being in the advanced manufacturing, bioscience, or information technology (IT) fields, having less than 500 employees, and all products or technology must be protectable by patent or trademark. The company must have an existing customer base, generate revenue, and be stable financially and operationally.

Up to $500,000 in funds are available as a loan or royalty. The borrower can repay this loan through revenue. To apply, you must produce a demo of your product and present your business concept to the IEDA Technology Commercialization Committee. This committee is responsible for scoring an applicant's investment viability.

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 $30,000.  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

3%-5%

Up to 5 years

$30,000 for new businesses,

$50,000 for existing businesses

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

3%

Straight 5-year term

$100,000 - $500,000

Iowa High-Quality Jobs Program

Loans, forgivable loans, tax credits, exemptions, and refunds

Variable

Ongoing

$100,000 - $10,000,000

Iowa Self Employment Program

Grants

Matching funds

Ongoing

$30,000

Top Online Iowa Small Business Loans

Business owners often also consider online business loans that are available nationwide:

1. Blue Vine

Blue Vine is best known for invoice factoring, covering urgent costs, such as manufacturing fees, upfront with finalization in as few as 10 minutes.  

Blue Vine Pros:

  • A rapid online application process
  • Answers in 24 hours
  • No security needed
  • Get 85%-90% of the upfront invoice value
  • No negative effects from your credit score
  • Borrow up to $5,000,000 

2. Fundera

Fundera is your one-stop shop for managing your business income and expenses, including accounting software, payment systems, and loans.

Fundera Pros:

  • See the best business loan rates from multiple lenders
  • Complete financial services and advice
  • Multiple integrations

3. Fundbox

Fundbox offers term loans and lines of credit.  You can be approved for up to $150,000 instantly with their user-friendly lending process. With great software and excellent customer service,  long-term relationships can form with this lender. 

Fundbox Pros:

  • Fast online application
  • Low credit scores are accepted
  • Receive up to $150,000 instant credit to use for whatever your business needs
  • Once approved, you can reapply easily

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

Source Link 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

Small Business Innovation Research and Small Business Technology Transfer Outreach Programs

IEDA connects small business innovation research and technology transfer outreach programs with BioConnect Iowa. 

This helps businesses apply for federal small business funding. This program also helps entrepreneurs:

  • 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.

University of Iowa

The Office of Veteran’s Business Development (OVBD) helps veterans and spouses by providing them with training, counseling, and mentoring. The Department of Defense also leads with the Transition Assistance Program at military bases worldwide. Boots to Business is relevant for entrepreneurs who plan to embark on a career, after discharge. 

Iowa State University

Iowa State University, Small Business Development office, provides free, confidential, customized counseling to help you develop your business.

Both of these schools also offer research and testing facilities for new product development.  For more information, contact the campus.

How to Prepare for an Iowa Small Business Loan

A loan application can convince lenders that you’re a reasonable investment risk. Preparation is key. Most are searching for the same three things regarding small business loan requirements in Iowa.  

  • Business Plan

Perhaps the most important document of all, the business plan provides a detailed summary of the product or service that you offer. It should also provide an analysis of your targeted customer base, your local and national competitors, and, finally, financial projections.  

Lenders and grant organizations will review this carefully to determine if your goals are attainable, your future growth is realistic, and to see the amount of funding you are eligible for.  

  • Credit Score

Your credit score provides lenders with insight into your spending and payment habits. If you have a good credit score, you will be eligible for more loans and increased financing.  

You should monitor your credit score regularly. This way you can fix errors in your credit score, pay your existing loans on time, and prevent any fraud (such as identity theft) from occurring.  

You can fix a credit score, but this takes time, so check your scores regularly before applying for a loan.

  • Business Revenues

To prove that your business is serious, you should build a market-ready product as soon as possible that will generate sales. Numbers don’t lie, and you’ll attract lenders by steadily growing your bottom line.

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!