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SBA Disaster Loans now available to Iowa businesses

March 23, 2020

The U.S. Small Business Administration has issued a disaster declaration in Iowa, allowing small businesses (defined as having 500 or fewer employees) affected by COVID-19 to apply for low-interest federal loans.

According to a Saturday press release, the declaration follows a federal funding request made by Gov. Kim Reynolds to the SBA’s Economic Injury Disaster Loan program. According to the release, interest rates will be 3.75 percent for small businesses applying for these loans and 2.75 percent for nonprofits. SBA offers a variety of loans and repayment methods, terms being determined on a case by case basis. The declaration applies retroactively, beginning January 31.

In the press release, Reynolds said the declaration would be “vital” in alleviating the financial burden of COVID-19 on small Iowa businesses. She added that she plans on continuing to work with the Trump administration to decrease this impact.

The SBA Disaster Loans are available to small businesses as well as private and nonprofit organizations statewide and offer up to $2 million in assistance toward COVID-19 induced economic injury.

“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.” the release stated.

Applications can be submitted on the Small Business Administration’s website, and monitored online after submission.

Applying right away might not be the best decision

Many are advising that it might be wise to wait to apply, as federal legislation is pending for business interruption loans which will likely be unavailable to businesses that have already applied for disaster loans. Eric Engelmann, in a Medium post published yesterday, lays out some of the pros and cons of applying for SBA Disaster Loans.

“An SBA loan might be the only and best—if risky—way to get working capital to help weather these turbulent times,” writes Engelmann. “But you need to go into this with a level head and clear thinking to decide if it is right for you. I hope these thoughts were useful in your decision-making process.”

For those looking to learn more about the SBA Disaster loans, Jayne Armstrong of Iowa SBA will be holding a Business Resource Webinar on SBA Economic Injury Disaster Loans on March 25 at 3:30 pm.

Tags: coronavirus SBA loans

SBA Disaster Loans now available to Iowa businesses | Clay & Milk

A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.

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