FINANCIAL ASSISTANCE
County
Programs and Incentives
NWIPDC Economic
Development Adm. RLF
State and
Federal Programs
Community
Tax Incentives
Funds
are available to qualified projects. Fund availability may be
subject to legislation.
O'Brien County Revolving Loan
Fund
The objective of the O’Brien
County Economic Development Revolving Loan Fund is to further
the public purpose of economic development through joint
private and public investments
that involve the creation of new jobs and income, or the
retention of existing jobs and income
which would otherwise be lost.
Revolving Loan Funds may be
used for the following:
Land Purchases
Building Purchases
Building Construction
Machinery Purchases
Equipment Purchases
Any other uses deemed appropriate by the
O’Brien County Revolving Loan Fund Committee
Length and project terms may be
based on the following criteria:
| 0 - 2 Years |
40% of
commercial interest fixed rate available to the applicant |
| 2 - 4 Years |
50% of
commercial interest fixed rate available to the applicant |
| 4 - 6 Years |
70% of
commercial interest fixed rate available to the applicant |
| 6 - 8 Years |
80% of
commercial interest fixed rate available to the applicant |
| 8 - 10 Years |
100% of
commercial interest fixed rate available to the applicant |
Tax Increment Financing
Tax Increment Financing (TIF) is a process whereby the
taxes generated by new development are captured by the
County and utilized to finance public improvements within the
county or related to a specific economic development project.
The way it works is that O'Brien County captures all new
taxes generated in specific areas created for the purpose of
economic development or the elimination of slum and blighting
influences. We then may utilize these funds for the
installation of sewers, water mains, storm sewers, street
construction, or acquisition and clearance.
Tax Abatement
A different program business owners might take advantage of
is tax abatement. The County may abate the property
taxes on new developments for a period of years. The
advantage is this program helps reduce the initial costs
experienced by a new business.
For more information
contact Kiana L.
Johnson 712-957-1313
NWIPDC
Economic Development Administration Revolving Loan Fund
Program
The U.S. Department of Commerce
Economic Development Administration has awarded Northwest
Iowa Planning and Development Commission a revolving loan
fund grant in the amount of $300,626. This grant requires
local matching funds in the amount of 100,209. Businesses in
seven of the nine counties served by NWIPDC are eligible to
apply for low interest loans if their respective county is
willing to provide the required local match. These seven
counties include Lyon, Sioux, O'Brien, Clay, Buena Vista,
Emmet and Palo Alto. These loans will be made to projects
where conventional loans were not available and/or the
complete amount of financing was not available. The primary
goal of this revolving loan fund will be to increase quality
employment opportunities in the seven eligible counties
through the use of these low interest loans. The interest
rate that will be charged is four percentage points below the
current money center prime rate as quoted in the Wall Street
Journal or the maximum interest rate allowed under State law,
whichever is lower, but in no case may the interest rate be
lower than 4%. This revolving loan fund will be governed by a
loan board consisting of 14 members drawn from the seven
participating counties. The membership will consist of one
supervisor and one appointee from the business/banking
community appointed by the board of supervisors from each
county. Potential borrowers should contact NWIPDC to
determine their eligibility for a loan.
The following will briefly
introduce the program and inform users about its proposed
guidelines:
1. Ideally, all loan
applications will be forwarded through existing county-wide
economic development commissions;
2. A minimum ratio of one permanent job created or retained
for every $10,000 of RLF funds must be maintained. The
NWIPDC target will be one job for every $7,500;
3. The maximum loan amount shall be $150,000 (or the per
capita allocation per county), the minimum loan amount
shall be $5,000;
4. Borrowers will be required to contribute a minimum of
10% personal or business equity into the project;
5. Borrowers will be required to provide evidence that
credit cannot be obtained from conventional lending
sources;
6. The maximum term of a loan will be 10 years with a
portfolio target of five years;
7. A first position is desired, but the loan review
committee may negotiate lesser positions depending on the
merits of the project;
The following is a partial list
of ineligible activities:
8. Public and quasi-public
borrowers are not eligible to receive RLF assistance unless
it directly benefits an identifiable business concern and
there is reasonable assurance that financed activity will
result in increased business activity.
9. Private developers are not eligible unless the activity
financed is non-speculative.
10. Loans to borrowers for the purpose of investing in
interest-bearing accounts.
11. Borrowing to acquire an equity position in a private
business.
12. Borrowing to subsidize interest payments on an existing
loan.
13. Borrowing to provide the equity contribution required
under other federal loan programs.
14. Borrowing to acquire interest in a company, either
through the purchase of stock or through the acquisition of
assets, unless acceptable justification can be provided
(example: saving it from imminent foreclosure).
15. Refinancing existing debt, unless there is sound
economic justification.
Anyone wanting additional
information on this RLF should contact Ted Kourousis at (712)
262-7225 Ext. 142
State and Federal Programs
Community Economic Betterment Account (CEBA)
– If your business will create or retain jobs, The State of
Iowa offers a program to to help you. CEBA provides
direct financial assistance to businesses for that very
purpose. Forgivable and low interest loans are available to
businesses to expand or relocate to Iowa communities.
Revitalization of Iowa’s
Sound Economy (RISE) Program
– The State of Iowa Department of Transportation offers this
program to provide financial assistance to cities for the
purpose of constructing transportation access to facilitate
business expansion or growth. Street or rail access projects
are fundable under this program.
Iowa State Targeted Small
Business Loan Program
– Women and minorities can take advantage of a loan pool
established by the State of Iowa for the creation and
expansion of small businesses. Loans are at a 4% interest
rate with a maximum of $25,000 available.
You need only have 10% of the grant amount in cash
equity.
State Enterprise Zone Programs
– O'Brien County has been designated as a State Enterprise
Zone. Tax credit incentives are offered to qualifying
businesses that locate to O'Brien County zones, or developers
who build housing units in an Enterprise Zone or businesses
that hire workers who live in the Enterprise Zone.
- A local property tax
exemption on the value added to the property.
- Additional funding for
training new employees. If applicable, these funds would
be in addition to those authorized under the Iowa New
Jobs Training Program.
- A refund of state
sales, service, or use taxes paid to contractors or
subcontractors during construction.
- An investment tax
credit of up to a maximum of 10% of the
new investment in machinery and equipment, land,
buildings, and improvements to existing buildings. This
Iowa tax credit may be carried forward for up to seven
years or until depleted.
- An additional research
and development tax credit of up to
6.5%, which may be refundable. This Iowa tax credit is
based on increasing research activities within the state
and is available while the business is participating in
the program for up to 10 years.
To receive these
benefits, businesses must:
- The business must make
a minimum capital investment of $500,000.
- The business must
create at least 10 full-time, project-related jobs and
maintain them for at least 10 years.
- The business provides
all full-time employees with the option of choosing a
standard medical and dental insurance plan of which the
business pays 80% of the premiums or a monetarily
equivalent benefit.
- The business must pay
an average wage that meets or exceeds 90% of the average
county or regional wage, whichever is lower. (Check with
the IDED for the community's current wage requirement.)
- The business can not be
a retail establishment or a business whose entrance is
limited by cover charge or membership.
- The business can not
close or reduce its operation in one area of the state
and relocate substantially the same operation in the
Enterprise Zone.
- The local Enterprise
Zone Commission and the Iowa Department of Economic
Development must approve the business' proposed project
prior to project initiation.
Businesses interested in
the Enterprise Zone program should consult the Iowa
Department of Economic Development along with relevant
local organizations to determine eligibility.
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Small Business Administration
7a Program – The 7a
program is a loan guarantee program whereby a business will
borrow financing from a local lender of choice for fixed
assets or working capital. The loan can be a maximum of
$750,000 with 20% - 50% down payment with terms set by the
lending financial institution. The loan is guaranteed by the
Small Business Administration.
Small Business Administration
504 Program – The
504 program is direct financing from SBA through a local
certified development corporation. Rates are fixed for a 20
year term at a rate reduced from bank financing. A total
$1,000,000 is available per project and you can get away with
having less down payment than standard financing.
For more information about
state programs
www.iowalifechanging.com/
One-size-fits-all project review application form.
http://www.iowalifechanging.com/applications/bus_dev/index.html
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Community Tax
Incentives
Hartley
Tax Incentives:
Commercial City Wide Tax Abatement Program
Enterprise Zone district established in Hartley Industrial
Park
New construction or renovations
(two options)
Option #1 3 years 100% tax
abatement
Option #2 10 year slide:
1st year =
80%
2nd year = 70%
3rd year = 60%
4th year = 50%
5th year = 40%
6th year = 40%
7th year = 30%
8th year = 20%
9th year = 20%
10th year = 20% |
Industrial Park Tax Abatement
Program (located in Tax Increment Financing District
Five Year Tax Abatement Program
1st year = 75%
2nd year = 60%
3rd year = 45%
4th year = 30%
5th year = 15% |
Paullina
Tax Incentives:
Paullina offers no tax incentives, however
such a possibility may be negotiable with the City Council.
Primghar
Tax Incentives:
The Primghar City Council and Primghar
Advancement Corporation have a very strong relationship and
are eager to assist businesses and industries by offering
various incentives.
Sanborn
Tax Incentives:
Negotiable with the city council
The City of Sanborn may offer
financial assistance to new or expanding businesses in the
amounts determined by the City and when deemed necessary.
Said assistance shall be made in accordance with all
applicable laws of the State of Iowa. All financing methods
and provisions shall be structured and approved by a
contractual agreement between the developer and the City of
Sanborn. Said agreement shall be executed before the release
of any committed assets.
Sheldon
Incentives:
SCDC Revolving Loan Fund-
A loan pool of $1,000,000 is
available to fund new or existing projects ranging from
industrial to retail in nature. The projects must enhance
local economic development and the activity must not be
eligible for conventional credit without the assistance of
this loan. The proposed business must be located within 5
miles of the city limits of Sheldon, Iowa. Loan funds must be
matched with private resources of no less and 1/3 of the
total project cost. Applications are reviewed for eligibility
by the Revolving Loan Program Committee. Loan amounts and
interest rate are also determined by the committee.
Intermediary Re-lending
Program-
A loan pool of $375,000 is
available to provide loans to new or existing businesses for
the creation or retention of jobs. Applicants must be unable
to get credit from private or conventional sources. Funds may
not be used to finance more than 75% of a project or exceed
$150,000, whichever is lower. Applicants are reviewed by the
Re-lending Program Committee and Farmers Home Administration.
Sioux County Revolving Loan
Fund-
A loan pool that can provide
financing of up to 30% of a project of $100,000, whichever is
lower. Maximum participation will be $5,000 for every job
created within two years. Interest rates depend on the term
of the loan. The maximum term of the loans are 10 years.
Participation is limited to commercial or industrial
projects. Projects must be located in Sioux County.
Industrial Property Tax
Exemption-
The City of Sheldon offers to
exempt from property taxation the actual value added to
industrial real estate by new construction, and the
acquisition of, or improvement to, machinery and equipment
assessed as real estate. The following exemption schedule is
applied in such cases:
Year #1: 75%
Year #2: 60%
Year #3: 45%
Year #4: 30%
Year #5: 15%
Tax Increment Financing (TIF)-
The City of Sheldon has created
Urban Renewal Districts in which to focus public improvements
related to the private development of real estate. The
incremental value in property tax revenues generated can be
utilized to finance such projects as public parking, street
improvements, extension of utilities, and site preparation.
Application is made to the City Council for approval.
Sutherland
Tax Incentives:
Enterprise Zone district established in the Sutherland
Industrial Park
Tax incentives are negotiable with the
Sutherland City Council.
Sutherland has two Tax
Increment Financing (TIF) Districts:
1) Industrial Park
2) Housing Edition
UTILITY INCENTIVE PROGRAMS
MidAmerican Energy
Business Loan Program
– The local energy company is a great partner in the
development of the community. MidAmerican participates in
economic development project through a loan program based on
job creation.
Northwest REC - Touchstone Electric Cooperative -
NWREC participates in economic development projects in their
service territory by virtue of a revolving loan fund and
utility service hookups.
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