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Finance| |  | IADG's members have received 154 USDA rural development funding awards. | | |
The Iowa Area Development Group has several services to offer new and expanding businesses. Site selection services include data on sites, buildings and communities. Hundreds of expanding companies have entrusted IADG with their site selection needs. The Iowa Area Development Group takes pride in responding quickly to your call with specific information focusing on your site selection criteria.
USDA REDL&G Update: USDA Rural Economic Development Loan and Grant Program (REDL&G) - Program SummaryAs eligible borrowers of the Rural Utility Service, Rural Electric Cooperatives can apply to USDA’s REDL&G Program to promote rural economic development and job creation projects. This competitive program allows for zero-interest "pass through" loans and grants for revolving loan funds.
To date, IADG Members have received over $51 million to assist with 154 projects resulting in $515 million in investment in Iowa.
 Zero-Interest "Pass Through" Loans:With a pass through loan, the REC is acting as both the borrower and the bank at the same time. The REC receives a loan from RUS and makes a subsequent loan at the same terms to the ultimate recipient. Therefore, the REC is guaranteeing 100% of the loan to the project.
- Maximum: $740,000
- Term: 10 years
- Interest Rate: 0% Interest
- Maximum Payment Deferment:
- 24 Months — Start ups
- 12 Months — Existing Businesses
- Recommended Collateral: Irrevocable Letter of Credit
 Grant for Revolving Loan Fund
With a grant program, the REC can establish a new revolving loan fund (RLF) or add more funds to an existing RLF. The REC receives a grant from USDA for the RLF. The REC must contribute a matching grant of 20% to the RLF. These initial funds must be loaned at 0% interest to a non-profit entity.
As funds are repaid, they stay in the REC Administered RLF to be loaned out to other projects. Subsequent loans can be made to for-profit businesses or non-profit entities.
Initial Terms include: - Maximum: $300,000
- Requiring REC match of: $60,000
- Interest Rate of Initial Loan: 0%
- Terms: 10 years
- Maximum Payment Deferment:
- 24 months - start-up
- 12 months - existing entities
- Applications
- Applications are accepted quarterly. Deadlines are December 15, March 15, June 15, and September 15. Awards for each round are announced 90 days after the applications are submitted.
- Processing Time:
- Submitting an Application: "Normal" processing time will vary from 30 to 120 days depending on the project. Ample time must be allowed in order to complete the business plan and environmental review.
- To Receive Funds: After an award is announced, there is generally 4 to 6 months worth of paperwork in preparation of releasing funds to the ultimate recipient. This makes the total estimated time span from start of application to receiving funds approximately one year.
REC Forms Project Forms
- Environmental ReviewAll applications are required to have an environmental review. Reviews are completed by USDA staff from information provided by the ultimate recipient. There are two levels of review: Class I and Class II.
- CLASS I A Class I review usually takes about 30 days to complete. This level of review is typical for projects on sites that that have no historical significance and are occurring on previously developed property. Class I Review Outline
- CLASS II A Class II review is automatically required anytime the project is occurring on a site with possible historical significance, in a flood plain, in a wetlands area, or converting farm ground to other uses. A Class II review can also be required in other circumstances. In order to start a Class II review, a archeological study of the site must be completed by a qualified party. Public notices and comment periods are required as part of a Class II review. Therefore, normal review time is at least 60 to 90 days. Click here for Form 1940-20.
- IADG Assistance & More InformationIADG will assemble the application for members. We have applications, sample documents, and business plan guides to assist with the process. Please contact Bruce Nuzum, 515.223.4817 or 1.800.888.4743 or email at bnuzum@iadg.com, for more information.
Iowa's Manufacturing Fuel Tax Exemption
The Iowa Department of Revenue and Finance has adopted expanded definitions of processing activities that are now considered exempt from state sales taxation. These can mean big savings for most manufacturing processors. Understanding Iowa's Manufacturing/Processing Fuel Tax Exemption is a manual commissioned by IADG for its members and their customers.
Download the Sales Tax Exemption PDF You must have the free Adobe Acrobat software installed on your browser to view PDFs.
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