Revolving Loan Funds may be used for:

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 criteria:

Length of Loan

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 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 businesses that expand or developers who build housing units in an Enterprise Zone or businesses that hire workers who live in the Enterprise Zone.

Iowa Corporate Income Tax -  Iowa's single-factor, non-unitary tax is based only on the percentage of total sales income within the state. An Iowa manufacturer selling all its products outside Iowa would pay no Iowa corporate income tax. Iowa allows 50 percent deductibility of federal taxes from Iowa corporate income tax. Iowa corporate income tax may be reduced or eliminated by the New Jobs Tax Credit and Research and Development Tax Credit.

No Property Tax on New Industrial Machinery and Equipment – Manufacturing machinery and equipment, as well as computers used to process data by insurance companies and financial institutions installed and first assessed on or after January 1, 1995, is exempt from property tax.

No Sales or Use Tax on Manufacturing Machinery and Equipment – The purchase of industrial machinery and equipment, and computers assessed as real property and used for manufacturing or used to process data by insurance companies, financial institutions, or certain commercial enterprises, is exempt from Iowa sales or use tax. No sales tax is due on purchases of electricity or natural gas used directly in the manufacturing process.

No Personal Property (Inventory) Tax -  Personal property is not assessed for tax purposes. In Iowa, personal property includes corporate inventories of salable goods, raw materials and goods in process.

New Jobs Tax Credit  -  Businesses entering into an agreement under the state's training program, and which increase their workforce by at least 10 percent, may qualify for this credit to its Iowa corporate income tax. This credit is equal to 6 percent of the state unemployment insurance taxable wage base. The credit for 2002 is $1,116 per new employee. The tax credit can be carried forward up to 10 years.

New Jobs and Income Program -  The Iowa New Jobs and Income Program provides a package of tax credits and exemptions to businesses making a capital investment of at least $10.38 million and creating 50 or more jobs meeting wage and benefit targets.

New Jobs Tax Credit -  Businesses entering into an agreement under the state's training program, and which increase their workforce by at least 10 percent, may qualify for this credit to its Iowa corporate income tax. This credit is equal to 6 percent of the state unemployment insurance taxable wage base. The credit for 2002 is $1,116 per new employee. The tax credit can be carried forward up to 10 years.

Pollution Control or Recycling Property Tax Exemption -  Pollution control and recycling equipment may be eligible for a property tax exemption. Improvements to real property that are primarily used to control pollution of air or water, or primarily used for recycling, may qualify. An application must be filed for exemption.

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.

Research Activities Tax Credit -  A credit for increasing research activities is 6.5 percent of the company's apportioned share of qualifying research expenditures in Iowa. A company must meet the qualifications of the federal research activities credit in order to be eligible for the credit on the Iowa return.

For more information about state programs www.iowalifechanging.com/