Iowa Direct Financial Incentives 2010
Iowa's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include industrial development bonds, umbrella bonds, and the Iowa Values Fund.
Area Development Research Desk (Feb/Mar 10)
Industrial development bonds:
Cities and counties provide tax exempt financing to businesses for land, buildings, improvements, and equipment. Facilities financed by bonds are subject to property taxation. The arrangement between the issuing authority and the company may be a loan, lease, or installment sales contract.
The Iowa Finance Authority's Economic Development Loan Program and Small Business Program assist in the development and expansion of manufacturers through the sale of tax exempt bonds and notes, the proceeds of which can be loaned for the financing of qualified projects.
Loans, grants, and equity financing:
The Iowa Values Fund (IVF) is the state's premier 10-year economic development program designed to transform Iowa's economy by creating high-quality jobs through business development and expansion across Iowa. The IVF assists Iowa companies to expand, as well as attract new businesses to the state. To be eligible, a business must provide a wage, plus benefits, that is equivalent to 130 percent of the county average. A business must also be in one of the state's targeted industries, which include biosciences, information technology/financial services, and advanced manufacturing.
The Community Economic Betterment Account (CEBA) may be used for loans or forgivable loans to aid economic development, site development, or machinery and equipment or technology modernization related to a project resulting in new or retained employment. Cities, counties, or community colleges are eligible to apply for these funds on behalf of a business entity. Business must meet certain wage thresholds. Up to $1 million may be provided for each project.
Through the Economic Development Set-Aside (EDSA) Program, funds are provided to cities with a population of less than 50,000 and counties for loans or forgivable loans to businesses. Direct loans and forgivable loans are offered to those businesses that create or retain jobs and need public financial assistance to do so. The business seeking assistance must meet certain wage thresholds and certify that at least 51 percent of the jobs created or retained will be filled by low- and moderate-income persons. The assistance cannot exceed $1 million for each project.
The Public Facilities Set-Aside program provides financial assistance to cities with less than 50,000 in population and to counties for public infrastructure improvements that enable businesses to create new job opportunities. Projects that will create manufacturing jobs, add value to Iowa resources and/or increase out-of-state exports will be given priority. Eligible projects include adding or improving sanitary sewer systems, water systems, streets, roads, and storm sewers.
The Entrepreneurial Ventures Assistance (EVA) program and Community Economic Betterment Account (CEBA) "Venture Project" component provides funds to start-up and early-stage companies. EVA provides initial investments up to $50,000 for product development, working capital, purchase of machinery and equipment, or other qualifying expenses. CEBA Venture Projects can receive equity-like investments of up to $250,000 where businesses are making capital investments and creating or retaining quality jobs.
The Iowa Loan and Credit Guarantee Fund is designed to assist businesses that might not have access to conventional financing. The fund provides lenders with additional security, thereby encouraging greater lender activity to Iowa businesses. In agreeing to guarantee a business loan, the Iowa Department of Economic Development assumes responsibility for up to 50 percent of a loan made by a lender should the business default or otherwise has suspended making scheduled payments.
Customized business training:
The Iowa New Jobs Training Program (260E) was developed to assist businesses that are creating new jobs. If the company is expanding Iowa operations or locating a new facility in the state, the New Jobs Training Program can provide flexible funding to meet the wide variety of training and employee development for new employees. The assistance available ranges from highly specialized educational programs to basic skills training for new positions. This program is administered through Iowa's Community College Network.
Other financing programs:
Iowa Value-Added Agricultural Products & Processes Financial Assistance Program (VAAPFAP) provides financial assistance to new or existing companies that utilize the state's agricultural commodities to create new, innovative products or to produce renewable fuels (including soy diesel, ethanol, and other renewable fuels). VAAPFAP can also assist those companies engaged in organic processing, bio-mass, and the creation of alternative energies. Financial assistance is provided in the form of loans and forgivable loans.
The RISE (Revitalize Iowa's Sound Economy) program earmarks financing for highway improvements designed to foster economic development. The program is administered by the Iowa Department of Transportation and is eligible for expenditures on city, county, and state highways. Funding may be used in conjunction with other sources of federal, state, local, and private finance for the purpose of improving area highways and specific access roads.
Iowa State Contact:
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, IA 50309
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.