Looking to start or expand your small business but struggling with funding? You are not alone!
Starting or expanding a small business in Iowa can be an exciting but challenging journey, especially when it comes to securing funding. Luckily, Iowa offers a range of funding options, from grants and loan programs to other financial assistance opportunities. These funding opportunities aim to support small businesses and entrepreneurs in bringing their ideas and visions to reality. From research, development, and technology to education, healthcare, and the environment, these funding options offer support across different industries.
Each funding option has different rules and regulations, eligibility criteria, application process, and requirements. On the one hand, grants are non-returnable funding, whereas bank loans need to be repaid along with interest. Therefore, it’s crucial to understand your budget and eligibility to choose the correct option. Let’s have a look at
top funding opportunities for small businesses in Iowa.
Targeted Small Business Program
The Iowa Targeted Small Business (TSB) Program is the top grant funding program for profit-oriented businesses in Iowa. It gives grants to businesses at least 51% owned and operated by women, minorities, service-disabled veterans, or individuals with disabilities.
TSB provides access to low-interest loans up to $50,000 ($30,000 for new businesses), which can be used for inventory, equipment, and operating expenses. As it is a loan, it needs to be repaid with an interest of 3-5%, fixed monthly payments. But the good news is loan terms are very simple and favorable. There are no prepayment penalties, and it offers up to 5-year repayment terms, which is a better option than any other loan.
Businesses can apply for a TSB loan through a nonprofit called the Iowa Center for Economic Success website.
Iowa Valley Training Grants
Iowa Valley Community College District (IVCCD) offers training grants to support businesses in enhancing their workforce skills. It offers 2 types of grants, covering manufacturing and workforce training programs for Iowa-based businesses. The grants offer funding for basic adult education, job-related instruction (including on-the-job training), skills assessments, testing, evaluation of employees, and travel reimbursement. As per the grant program, businesses can get funding of up to $100,000 in total for 3 years.
Iowa New Jobs Training Program (260E) assists businesses in expanding or establishing new operations in Iowa. Iowa Jobs Training Program (260F) helps Iowa businesses fund customized training for current employees. Each project at a business site can receive up to $25,000 in funding. A cash match is required for projects costing more than $4,999.
These funding opportunities are available through Iowa grant applications for businesses looking to enhance their workforce.
Proof of Commercial Relevance (POCR) Program
POCR offers low-interest loans for businesses in advanced manufacturing, IT, or biosciences. This program offers loans of up to $50,000 that can be used for activities related to beta testing or intellectual property development. It is the best option for early-stage tech companies that require funds for beta testing or market validation. Companies can use the funds for competitor analysis, product testing, and focus groups only.
The main eligibility criteria for securing a loan from this program are that the company should be Iowa-based and have less than 500 employees. Additionally, the company has to seek market validation of the idea and research prior to commercial launch. It’s crucial that the business must have a functional prototype of its technology and have at least 2 co-founders who remain actively engaged in the business.
Iowa Innovation Acceleration Fund
The Iowa Economic Development Authority (IEDA) runs the Iowa Innovation Acceleration Fund for high-growth tech companies in Iowa. This program offers funding of up to $500,000, which can be structured as a loan or royalty that companies have to pay back with the previous year’s revenue. To become eligible, the company must have less than 500 employees and the product must be owned with a patent or trademark. This program offers funds only to businesses in bioscience, advanced manufacturing, or information technology (IT) industries.
Getting funding via the Iowa Innovation Acceleration Fund is quite challenging. It requires a proven business model, a demo of the product or technology, and an established customer base, and the business must be earning significant revenue. To get funding, businesses even have to present their business idea to the IEDA Technology and Commercialization Committee.
Small Business Collateral Support Program
Small business collateral support programs help businesses secure SBA and other loans for different purposes. Businesses can use the funding for everything from purchasing supplies and extra working capital to startup costs and hiring employees. This program basically provides up to 40% of the collateral needed for loans between $50,000 and $250,000. The best thing about this is that the grant amount does not need to be repaid, therefore making the unsecured loan a secure one.
To qualify for this loan, the business must be majority-owned by women, disabled individuals, minority group individuals, veterans, or long-term residents of rural communities or CDFI investment areas. The loan officer provides guidance through the process and determines eligibility. Businesses can find the contact number of loan officers from the list of approved lenders mentioned on the site.
Amber Grant for Women
The biggest and most popular grant for women-owned businesses is the amber grant. Amber grant is awarded to multiple women wishing to start or grow their businesses. This grant offers monthly $10,000 grants to women-owned businesses. In addition to the monthly grants, all monthly winners are eligible for the $25,000 annual grant.
The program is open to a wide range of businesses, from product-based to service-based, and no specific industry is prioritized. Moreover, the grant is available for both established businesses and startups. Businesses have to submit an online application with a brief description of their business, goals, methodologies, budget and how they plan to use the funding.
Any women-owned business can apply for this grant just by completing the online application and paying a $15 entrance fee.
Rural Business Development Grants
Rural business development grants are a federal program aimed at promoting economic development and job creation in rural areas. This program grants funds to small businesses in rural areas and provides them with technical assistance and training. The funds must be used in rural areas or towns with fewer than 50,000 people. Eligible projects include training, technical assistance, pollution control, rural transportation, economic development, and land acquisition or development.
There’s no maximum grant, but smaller requests get priority. The two grant types are Opportunity (10% funding limit) and Enterprise (for small rural businesses). Rural businesses can apply through USDA Rural Development’s local or state offices.
Conclusion
We have mentioned some of the best funding opportunities for small businesses in Iowa. From targeted small business programs to rural business development grants, these funding programs offer money for different projects. It’s important to fulfil the eligibility criteria to qualify for the grant or loan funding. Make sure to fill out the application in the correct manner and submit it on time to increase your chances of winning.
