Types of Loans Available
Commercial Bank Loans do not require entrepreneurs to turn over equity or company control. In general, banks prefer to make business loans of over $10,000. Banks like to see:
- Good credit
- A solid business plan
- Ability to repay the loan
Line of Credit is an arrangement in which a bank extends a specified amount of credit to a borrower for a limited time period. A line of credit is best suited to help cover everyday expenses that tend to fluctuate throughout the course of a year.
Home Equity Loans are a cost-effective alternative to other types of loans because they offer good interest rates. However, you may not want to risk your family home to launch your business venture.
Equipment Lease Financing gives you access to many types of equipment -- computers, copiers, fax machines, cars and trucks -- without tying up your cash or credit lines. Although it doesn't bring in cash, leasing reduces the amount of cash you otherwise have to raise to start.
Cash Advances From Credit Cards are an easy and quick way to gain access to cash; but as a long-term financing method, they can be expensive -- credit card interest rates typically run much more than you would likely pay on a bank loan.
Factoring allows a company to "sell" its accounts receivables to an outside company at a discounted rate. This allows the company to receive funds immediately to fund operations and ease cash flow. Factoring is done by private companies.
State of Iowa
- State of Iowa Financial Assistance is in the form of loans and/or forgivable loans. This is based in part on job creation, capital investment, certain wage standards, quality of employment, and economic benefits for the state and local community.
- Demonstration Fund provides financial awards up to $150,000 to encourage commercialization activities by small and medium-sized Iowa companies in the advanced manufacturing, biosciences, and information technology industries.
- Entrepreneurial Assistance financial capital may be available for early-stage and high growth companies.
- Iowa Self-Employment (ISE) assists qualified individuals with disabilities to establish, acquire, or expand a small business by providing technical and financial assistance.
- Every county in Iowa is covered by a Revolving Loan Fund- in some cases, multiple. Click through the link to see what is available in your region to access.
In any case, contact the Iowa Business Concierge
to learn more about each of the programs above, and to get connected to the right person at each organization.