Purpose

The primary purpose of the Black Hawk IRP Loan Fund Program (IRP Program) is to promote new business startup, expansion, and/or retention projects in rural areas. In fulfilling its purpose, Black Hawk Economic Development, Inc. seeks to foster capital investment, as well as, job creation and retention. In addition to business projects, the Black Hawk IRP Loan Fund fosters community objectives by providing financing for qualifying community based projects.

IRP Program Service Area


Iowa

The Black Hawk IRP Program service area includes rural areas and communities in Benton, Black Hawk, Buchanan, Grundy, and Tama Counties and portions of Bremer, Butler, Chickasaw, and Floyd Counties, all in the State of Iowa.

Eligible Applicants

To be eligible for the Black Hawk IRP Program, a business must meet the generally accepted definition of a small business: for profit, independently owned and operated, and not dominant in its field of operation. The business must also certify it will employ at least 10% of workers from members of families with income below the poverty line and that no delinquent debt to the federal government exists. IRP Program projects are reviewed on a competitive basis with emphasis on those projects whose primary operation involves manufacturing, commercial services, or wholesaling of commercial goods. In addition to qualifying businesses, communities and community based organizations may apply.

Objective

The goal of the Black Hawk IRP Fund is to improve the economic well being of the rural service area through sound economic/community development strategies and practices, to include:
  • Increased new business startup, business expansion and retention activities
  • Increased diversification of the economic base and development of exporting and minority opportunities
  • Sustained/increased employment opportunities (new jobs and job advancement)
  • Increased capital investment, and property and sales tax revenues

Local Administration

The Black Hawk IRP Program is administered by Black Hawk Economic Development, Inc. on a local level with the Loan Committee responsible for program supervision. As such, the Loan Committee reviews loan applications for compliance with the organization's IRP Plan and makes the decision as to the local participation in a project. The Loan Committee is also responsible for loan servicing issues (e.g. loan extensions, collateral subordination, etc.).

Type of Business Assistance

The Black Hawk IRP Fund Program is a "gap financing" program, which provides direct financial assistance to rural small business/communities that cannot obtain reasonable financing on a conventional basis.

General Requirements

A loan applicant must:
  • Be of good character and/or good standing
  • Demonstrate ability to operate the business successfully
  • Possess adequate capital to operate the business on a successful basis
  • Demonstrate sufficient past and/or future earnings to repay the loan
  • Provide adequate business collateral to assure loan repayment

Use of Funds

Eligible Use of Funds
  • Acquisition of real estate (to include land, building, etc.)
  • Building construction or improvement
  • Purchase of machinery or equipment
  • Working capital*
* Community loans not eligible for working capital

Ineligible Use of Funds
  • If credit is otherwise available on reasonable terms and conditions
  • If the loan is to solely pay off a loan to another creditor to reduce its risk
  • A loan for agricultural or speculative purposes
  • A loan to an enterprise primarily engaged in lending or investing activities or whose principal income is derived from gambling activities
  • If the loan encourages monopoly, or is inconsistent with the accepted standards of the free competitive enterprise system
  • If the loan is used to relocate a business from one commuting area to another or inside or outside of a target area

Collateral

Black Hawk IRP Program loans must be adequately collateralized to assure repayment of the loan. Personal guaranty(s) generally apply.

Collateral for a loan may consist of a security interest or lien on one or more of the following:
  • Accounts Receivable
  • Inventory
  • Machinery and Equipment
  • General Intangibles
  • Commercial Real Estate
  • Fixtures on Real Estate
  • Chattel paper
Additional collateral may be required if the project assets are not sufficient in relationship to the total project cost(s).

Project Review

Black Hawk IRP Program applications are reviewed on a competitive basis with consideration given to the following items:
  • Type of business
  • IRP Program job leverage (loan request divided by number of jobs created/retained)
  • IRP Program financial leverage (IRP dollars divided by IRP dollar requested)
  • Local economic impact
  • Business Plan
  • Requested loan term and conditions
  • Applicant's financials, to include credit reports, collateral and cash flow analysis
  • Applicant's participation; typically at least ten percent (10%) of total project cost

Application Process

Develop a Business Plan, to include
  • Summary of a sound business project
  • Organizational structure/management
  • Marketing plan
  • Schedule of project cost(s)
  • Proforma financial statements (i.e. Balance Sheets, Income Statements, and Cash Flow Statements)
  • Historical financial statements, to include tax returns (3 most recent years)

Commercial Lender Review
All projects are initially reviewed by a commercial lender to determine the financial institution's participation in the project and the identification of a financial gap.

Complete the Financial Assistance Application
If your business and/or project is eligible, and a financial gap is identified, contact us at:

Black Hawk Economic Development, Inc.
1001 Peoples Square
Waterloo, Iowa 50702
Phone: (319) 235-2960
Fax: (319) 235-9171
Email: bhed@bhed.org

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