“Accessing Iowa’s Revolving Loan Funds”

Bruce Nuzum

Iowa Area Development Group

Community Vitality Center Presentation2005 Entrepreneurship AcademyOctober 21, 2005

CVC Entrepreneurship Academy

• Introduce Iowa Area Development Group

• Share IADG’s RLF Success Story

• Explore Iowa’s RLFs

Presentation Overview

The economic development organization for Iowa Rural Electric Cooperatives & associated Municipal Utilities.

Membership85 consumer owned utilities

IOWA AREA DEVELOPMENT GROUP

“IADG: Powerful Partnerships...

connecting people and resources

to grow businesses and communities

in Iowa!”

Sponsors

Mission

Creating & Sustaining An

Economic Development Culture

Among Member Utilities

Strategy

TRAINING

RESEARCH

T AE SC SH IN SI TC AA NL C E

MARKETING

Results

• 507% increase in C&I power sales

• 388% increase in C&I revenues

• 73 industrial parks (5,385 shovel ready acres)

• 56 speculative buildings (1.5 M sq. ft.)

• 98 USDA awards ($28 million)

• 31 rural revolving loan funds

• 1,000 plus projects

IADG’s “RLF Success Story”

• USDA RD REDG Program• USDA RD IRP Program

31 RLFs totaling over $21 million– $214 million private investment– 5900+ jobs created / retained

Iowa’s Vast RLF Resources

Who Operates RLFs?• Councils of Government

www.iarcog.com/regions.htm

• City / County Development Organizations• Rural Electric Coops• Rural Telcos

Iowa Rural Development Council

RLF Survey & Electronic Data Base– Preliminary - 73 RLF Funds– Access, Balance, Term & Contact

Information ultimately available at:

www.iowarural.org

www.iowarural.org

www.iowarural.org

www.iowarural.org

RLF Borrowing Opportunities

Entrepreneur Responsibility• Know the RLF

• Strategy & Priorities• Loan Limits & Terms• Available Funds

• Prepare before you Apply• Business Plan• Cost Estimates• Other Sources of Funds

RLF Borrowing Opportunities

• Eligible Applicants• Eligible Uses of Funds• Ineligible Uses of Funds• Loan Terms• RLF Project Lending

Eligible Applicants

• New or Expanding Private Businesses• Local Governments• Non-Profit Community Organizations

RLF Project Lending

• Manufacturing• Service• Value Added Agricultural• Retail• Medical• Community Facility

Eligible Uses of Funds

• Land Purchase

• Buildings

• Machinery & Equipment

• Infrastructure

Ineligible Uses of Funds

• Pre-development Costs• Refinancing• Production Agriculture*• Housing**

*Varies by fund

**Limits may apply

Loan Terms (Typical)

• Amounts: Minimum/Maximum $5,000 to $150,000• Rates: 0 to Prime - Ave 3 - 4%• Terms: Based on Collateral

Building 10 yearsReal Estate 10 yearsEquipment 5 to 7 years

• Other Funding: 20 - 50% Equity or other Sources

Iowa’s Vast RLF Resources

Who Operates RLFs?• Councils of Government

www.iarcog.com/regions.htm

• City / County Development Organizations• Rural Electric Coops• Rural Telcos

More Info At: www.iowarural.org