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Incentives
Financial
assistance and incentives are available through
CAEDC from federal, state,
regional, local and private
sources for expansions, start-ups, and re-locations.
Financial assistance includes "gap" financing programs
(state and federal), SBA 504, 7A and guarantees
along with USDA guarantee programs. Incentive programs
include Tax Increment Financing or property tax
abatement, sales tax relief (in certain circumstances),
and training programs. The following, are the specific
program details:
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STATE
OF IOWA PROGRAMS:
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| To
be eligible for funding from state programs,
your project must create or retain jobs in Iowa. |
| Iowa
Department of Economic Development |
| Community
Economic Betterment Account (CEBA): This
program provides forgivable and low-interest
loans to aid economic development, site development,
or infrastructure costs related to a project
resulting in new or retained employment. Up
to $1 million may be provided for each project,
and businesses must meet certain wage thresholds.
Applications are evaluated based upon the number
of jobs created; both public and private matching
funds; the level of need by the business; and
the impact of each project on the local economy
and the State of Iowa. |
| Economic
Development Set-Aside (EDSA) Program: Projects
that are located in cities with populations
of less than 50,000, or in a county may be eligible
for forgivable or low-interest loans from this
program. The maximum incentive level from this
program is $500,000 for a project, which creates
or retains jobs. The business seeking assistance
must meet certain wage thresholds. Applications
are evaluated based upon the number of jobs
created; both the public and private matching
funds; the level of need by the business; and
the impact of the project on the local economy
and the State of Iowa. |
| New
Jobs and Income Program (NJIP): This program
provides a package of tax credits and exemptions
to businesses making a capital investment of
a minimum of $10.87 million and creating 50
or more jobs meeting specific wage and benefit
targets. Eligibility requirements include: 1)
creating 50 or more new jobs for at least 5
years, 2) pays a median wage of at least $11.96
per hour or 130% of average county wage for
new jobs, which ever is higher, 3) makes a capital
investment of at least $10.87 million, 4) provides
and pay at least 80% of health and dental insurance,
5) business does not close or significantly
reduce operations elsewhere in Iowa. Requires
a business plan. No construction can be started
prior to awarding of state funding. |
| Revitalize
Iowa's Sound Economy (RISE): This program
can be used to pay for the costs of transportation
directly related to the economic development
project, such as a railroad spur or a road. |
| Iowa
Job Training Programs: The programs are
administered through the local community college
and is designed to help pay the costs of developing
work specific skills in employees. |
| Iowa
Small Business New Jobs Training Program:
This program is similar to the Iowa Industrial
New Jobs Training Program, but is designed for
smaller businesses. The funds may be used for
skill assessment, orientation, pre-employment
training, instructional salaries, seminar fees,
and on-the-job training. |
| Iowa
Retraining Program: When a business retools
or replaces obsolete equipment or methods with
new ones, it often needs a workforce with different
skills. Western Iowa Tech Community College
will design a program to help businesses retain
workers in an environment of technological change. |
| Community
Development Block Grant Fund (CDBG): This
program is administered by the Iowa Department
of Economic Development under federal guidelines.
The funds can be used by the city for a range
of activities, including business incentives.
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Regional Programs:
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Intermediary Relending Program Revolving Loan Fund (IRP): The Cherokee Area Economic Development Corporation, in conjunction with
several area banks, created the Intermediary Relending Program Revolving Loan
Fund (IRP) to improve the quality of life in Cherokee County by contributing
to the long-term improvement of the local economy.
The IRP is a local funding source with a goal of providing low interest
loans to assist with local economic and community development projects. Our
priorities include job creation and retention, diversification of the local
economy, improving the skills of the rural workforce, and upgrading the
public infrastructure to improve the health, safety, and/or medical care of
rural residents. This fund is administered by the IRP Committee, consisting
of local business people dedicated to the growth of businesses in Cherokee
County.
Following is a summary of the RLF loan terms, program eligibility
requirements, and a list of the eight communities where the fund is
available:
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Eligible Applicants include organizations involved in community or economic
development projects:
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New or Expanding Private Businesses
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Local Governments
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Non-profit Community Development
Organizations
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Eligible Uses of Funds:
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Land Purchase
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Building Construction/Expansion
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Machine & Equipment
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Infrastructure
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Housing
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Ineligible Uses of Funds
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Agriculture Production
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Financial, Investment, or Insurance Companies
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Golf Courses, racetracks, or gambling facilities
- Loan Terms are set by the IRP Committee based on the financial need of the
project.
The following are to be used as a guide for application requests:
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Loan Amounts
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Minimum Loan $5,000
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Maximum Loan $150,000
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Interest Rates will vary from 4% to Prime Rate depending on the financial
need of the project and its benefits to the rural area. Generally, loans
will have a 5.5% interest rate.
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Terms and Security
The RLF requires adequate collateral for the loan request.
Preferred security is an irrevocable letter of credit. Other
acceptable collateral includes a first lien on real estate and/or
machinery & equipment.
The maximum loan term is 10 years. Generally, the
length of the loan will be based on the
collateral offered by the applicant:
Small Businesses 3 to 10 years;
Industrial Park/Spec Building 3 to 5 years;
Infrastructure 5 to 10 years;
Construction (Interim) 1 to 3 years;
Housing Development 7 to 10 years
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Other Funding
A minimum of 50% of the project must be funded from equity or debt sourced
other than the CAEDC Revolving Loan Fund.
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Administration & Fees
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No processing fee is charged
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Closing costs and other related out of pocket expenses will be charged
to the borrower
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A 2% origination fee will be charged to the borrower at the time of
closing
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Fund Availability
IRP loan applications are subject to funds available
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Target Communities
Businesses residing in Cherokee County are eligible for the CAEDC IRP
funds. These communities are:
*Aurelia *Cherokee *Cleghorn *Larrabee *Marcus *Meriden *Quimby *Washta
IRP Application Form
More Information
For more information, loan applications, or to check availability of funds,
contact:
Mark Buschkamp
Executive Director, CAEDC
418 W. Cedar, Suite B
Cherokee, IA 51012
712-225-5739
markcaedc@evertek.net
Mike Hunter
Cherokee State Bank
PO Box 1000
Cherokee, IA 51012
712-225-3000
The Cherokee County IRP Revolving Loan Fund is an equal opportunity provider and requires
loan recipients to adhere to all equal opportunity laws.
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City
of Cherokee Programs:
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| Tax
Increment Financing: The city has several
designated Urban Renewal Areas or Tax Increment
Financing Areas. If your business is located
in one of those areas, it may be eligible for
public improvement financing that uses the additional,
or incremental taxes that the project will generate
to help finance the cost of the project. |
| Tax
Exemptions: Also called Tax Abatement. Under
some circumstances, and within certain pre-defined
geographical areas, the city has the authority
to abate taxes that are to be paid on improvements
to property within the area. |
| Industrial
Revenue Bonds: The city can issue bonds
for some economic development projects. The
bonds are normally issued at a lower rate of
interest than might otherwise be available to
the business. Industrial revenue bonds are subject
to a state maximum. |
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Private
Sources:
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| Siouxland
Economic Development Corporation (SEDC):
The SEDC is a nonprofit corporation which administers
several different loan programs, including a
micro-loan program. The SEDC portfolio includes
Small Business Administration (SBA) loans, Economic
Development Administration (EDA) loans, Community
Development Block Grant (CDBG) loans, and loans
from its own internal sources of cash. |
| Mid
American Energy: The utility company actively
promotes economic development in its service
area. As a part of those efforts, it has a program
that can provide assistance to businesses that
are starting up, moving to, or expanding in
the SiouxIand area. |
| Northwest
Iowa Power Cooperative (NIPCO): NIPCO is
a generation and transmission (G&T) cooperative
serving wholesale power to nine member rural
electric cooperatives and many municipal electric
systems in western Iowa. NIPCO promotes economic
development in its service area and actively
pursues business development and expansion projects.
In addition, NIPCO can provide land and building
data, demographics for the area, and financial
assistance. |
| Western
Iowa Tech Community College (WITCC): WITCC
administers the Iowa Industrial New Jobs Training
Program, the Iowa Small Business New Jobs Training
Program and the Iowa Retraining Program. |
| Iowa
Lakes Electric Coop (ILEC): A rural electric
coop operating in Cherokee County promotes economic
development activities throughout its service
area with a variety of programs. |
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