The Iowa Economic Development Authority (IEDA) has announced a $96 million investment in growing Iowa’s small businesses, including startups, manufacturers and businesses owned by veterans and individuals from diverse backgrounds.
The funding is available through the U.S. Treasury Department’s State Small Business Credit Initiative (SSBCI), a small business aid program that was expanded through the federal American Rescue Plan Act. The SSBCI will fund approximately $4.8 billion across 31 state plans.
“This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities,” said Secretary of the Treasury Janet Yellen in a statement Oct. 11. “I’m excited to see how these SSBCI funds will promote equitable economic growth across the country.”
“Small businesses and entrepreneurs dream big, drive Iowa’s economy and make our communities better places to live,” Gov. Kim Reynolds said. “This funding will build on the momentum by investing in our small businesses and entrepreneurs just as they have chosen to invest in Iowa.”
The Treasury Department approved Iowa’s amount based on a plan submitted by IEDA. Iowa’s SSBCI dollars will focus on encouraging venture capital and investment in scalable innovation companies through these programs:
- Loan Participation Program for Manufacturing 4.0 Investments: $28 million to help Iowa manufacturers invest in the new technologies that are transforming the industry. The state will purchase part of the loan to help offset risk for lenders.
- Small Business Collateral Support Program: $15 million to help small businesses offset collateral shortfalls as they secure loans through commercial lenders. Eligible borrowers include small businesses that are 51% owned by women, individuals from diverse backgrounds, veterans, individuals with disabilities, and long-term rural residents; and small businesses that enhance arts and culture in Iowa.
- Venture Capital Innovation Fund Program: $22 million to increase funding opportunities across the state’s assistance programs for entrepreneurs. This fund also will provide more funding to address gaps in startup development phases as businesses work through concept, launch and expansion.
- Venture Capital Co-Investment Fund Program: $31 million to process and hold equity investments in private companies and ensure investments are qualified.
“Iowa’s small businesses have faced some of the biggest economic challenges of the last few years, but they also have some of the greatest success stories and we’ve seen a record-breaking surge in new businesses for two years in a row,” said Debi Durham, executive director of IEDA and the Iowa Finance Authority.
The SSBCI was established in 2010 to increase access to capital for traditionally underserved small businesses and entrepreneurs.
Planning for the SSBCI application process is underway. For more information, visit iowaeda.com/ssbci.
