Iowa Admin. Code r. 261-55.3 - Application and approval
(1)
Application procedures. Application materials may be obtained
from the authority .
(2)
Maximum funding. The maximum loan amount is $50,000. The
interest rate charged shall not exceed 5 percent per annum or be less than 0
percent per annum. A targeted small business shall not receive a loan under the
program that provides more than 90 percent of the funding for a project. All
applicants must invest at least 10 percent of the total project budget in
cash.
(3)
Term.
The term of a loan shall not exceed five years.
(4)
Eligible uses of funds.
Program funds shall be used for legitimate business expenses, including but not
limited to purchase of equipment and furnishings, inventory, purchase of and
improvements to land and buildings and specific operating expenses.
(5)
Ineligible uses of
funds. Program funds shall not be used to refinance existing debt. For
the purposes of this subrule, existing debt does not include interim financing
for allowable program purposes intended as a bridge loan obtained after the
date a program loan is approved. Program funds shall not be used to facilitate
financing of a project that would consist solely of relocation of an existing
business within Iowa.
(6)
Threshold criteria. Applicants for funds under the program
must meet the following minimum criteria before their applications will be
considered complete and eligible for evaluation:
a. The business must be eligible for
certification as a targeted small business pursuant to 261-Chapter 52 at the
time of application . The authority will educate applicants about the benefits
of such certification and encourage applicants to seek certification.
b. An applicant must be a resident of Iowa
for at least six months to be eligible to apply for assistance. Applicants may
be asked to provide necessary documentation to prove legal residency. An
applicant who has not established a permanent place of abode in Iowa or who has
not abandoned a permanent place of abode in another state shall be presumed to
not be a resident of Iowa. A place of abode that is leased or rented shall be
deemed permanent if leased or rented for a period of at least one
year.
c. All applicants shall make
a report regarding violations of law and address generation of solid or
hazardous waste consistent with the requirements of Iowa Code section
15A.1(3).
(7)
Submittal. Applicants shall submit an application to the
authority in the form and content prescribed by the authority .
(8)
Review.
a. Applications are reviewed for
completeness. If additional information is required, the authority will notify
the applicant. If the requested information is not provided by the deadline
indicated in the notice, the application may be considered incomplete or
ineligible.
b. The authority will
establish a committee of at least three individuals to review all
applications.
(9)
Evaluation. Applications are evaluated according to the
following criteria:
a. Applicant credit score
and outstanding liabilities.
b.
Source(s) of the applicant's income.
c. Debt service coverage ratio.
(10)
Negotiations.
a. The
authority reserves the right to negotiate the amount, term, interest rate, and
other conditions of the loan prior to or after award.
b. The authority may decline to award funds
to a business if there is a negative credit report (e.g., bankruptcy,
foreclosure, tax liens, or unpaid or past due child support).
(11)
Award
decision. If an application is approved by the review committee , the
applicant business will receive an award letter that states the amount of the
award, conditions of the award, any required security agreements, and the
amount of monthly loan repayments. If an application is denied by the review
committee , the applicant will receive a denial letter stating the reasons for
denial.
(12)
Reapplication. An applicant whose application is denied by the
review committee cannot resubmit an application for the program for 90 days
from the date of the denial letter.
Notes
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