Targeted Small Business Assistance
The Targeted Small Business (TSB) Assistance Program supports the creation and expansion of small businesses that are certified as a “targeted small business”.
Getting Your Business Certified
The business must be certified as a "Targeted Small Business" by the Iowa Department of Inspections and Appeals before applying for or receiving TSB funds or enjoying other program benefits. The basic requirements to be a certified TSB in Iowa are:
- Business must be located in Iowa
- Business must be operating for a profit
- Business must have less than $4 million in annual gross income, computed as an average of the preceding three fiscal years.
- At least 51% of the business must be owned, operated and actively managed by a female, a minority group member or a person with a disability.
To apply for certification, contact the Iowa Department of Inspections and Appeals [www.dia.iowa.gov].
Financial Assistance
Certified TSB’s can apply for loans to start or expand a small business with these terms:
- Maximum loan amount is $50,000
- Maximum interest rate is 5% (can be anywhere from 0% - 5%; interest rate is determined by the loan review board and varies for each applicant).
- Successful applicants will have 5 years to repay the loan
- The first installment can be deferred for three months for a start-up business and one month for an existing business.
- Applicant must have 10% equity in cash for the loan.
- Example: if you need $25,000 to launch your new business, you must have $2,250 in cash that you will be investing in the business. The TSB program would then lend the balance ($22,750), if approved.
- Use of the loan funds for most any business purpose such as to purchase equipment, inventory, supplies, marketing costs, etc.
- Loans CANNOT be used to refinance or consolidate existing debts, travel or training, nor for purchase of real estate.
Other Financial Assistance
- Equity grants up to $50,000
- Grants shall only be awarded in instance where the grant will leverage a significant amount of other bank financing such as SBA or conventional bank loans.
- In order to be eligible for a grant the applicant must also demonstrate a minimum of 10% cash investment in the project.
EXAMPLE - Mr. Carter needs $100,000 for his project. He goes to his bank but they require 30% equity (cash down payment). He only has $10k, but as a certified TSB he applies for a $20k equity grant to help leverage the loan. His $10,000 plus the “State’s” $20,000 grant gives him the 30% equity he needs. The bank then loans Mr. Carter $70,000, so now he has the $100,000 needed for his project.
Eligibility Requirements
The Targeted Small Business program is designed to assist in the creation and expansion of Iowa small businesses that meet all of the following criteria:
- Certified as a "Targeted Small Business" by the Iowa Department of Inspections and Appeals
- Operating for a profit
- Annual gross sales of less than $4 million
- At least 51% owned, operated and actively managed by women, minorities or persons with a disability
Application
Once a business has been certified as a "Targeted Small Business" by the Iowa Department of Inspection and Appeals, they may apply for financial assistance.
It is only necessary to fill out the Pre-Qualification Application if an applicant would like to receive technical assistance on the full version of the Targeted Small Business Financial Assistance Application though one of the States's contracted providers.
The Targeted Small Business Pre-Qualification Application is used to verify an applicant's ability to be certified as a Targeted Small Business and their credit worthiness. Once the previously mentioned criteria are confirmed, an applicant is invited to fill out the full version of the TSB Application and receive technical assistance on the application.
Applications must be submitted by these deadlines in 2012 to be reviewed by the Loan Review Board at the monthly meeting. Review of incomplete or inaccurate applications will be delayed until all missing or incorrect data is submitted.
| TSB Applications Due (Monday) |
TSB Board Meeting
(Wednesday) |
| January 23 |
February 15 |
| February 20 |
March 21 |
| March 26 |
April 18 |
| April 23 |
May 16 |
| May 29 |
June 20 |
| June 25 |
July 18 |
| July 23 |
August 15 |
| August 27 |
September 19 |
| September 24 |
October 17 |
| October 22 |
November 21 |
| November 19 |
December 19 |
Additional Benefits to TSB Certification
There are many advantages to having your business certified as a TSB:
- Access to the 48 Hour TSB Procurement website. This secured website is the location where all state agencies post their buying needs (bids) 48 hours before the public can see them. This gives a TSB a two day “head start” before non-targeted small business.
- Free technical assistance. This one-on-one business guidance and counseling is available to help applicants with improving business plans, completing the TSB loan application, or other business operational concerns at no cost.
- Listing of your business on the TSB Online Directory. State agency purchasing directors and private enterprise frequent this directory https://dia.iowa.gov/tsb/index.php/search
Procurement
According to Iowa Code, each year State Agencies are required to set a spending goal related to doing business with targeted small businesses. The spending goals each agency sets are self-determined but the agency should strive to exceed the previous year’s goal.
Certified TSBs are encouraged to market directly to State Agencies, letting them know of their capabilities and their interest in doing business with the agency. Periodically we offer workshops called “Doing Business with the State of Iowa” around the state, where TSBs can hear directly from purchasing agents with some of the States larger agencies (for example Department of Transportation or Department of Administrative Services).
Resources
To Learn More:
Phone: 515.725.3146 or 800.532.1215
E-mail: smallbusiness@iowa.gov