Agency to offer new smaller business loans

Officials with a microenterprise loan agency expect to begin taking applications next month from new businesses seeking small loans from a $750,000 fund.

The Iowa Foundation for Microenterprise and Vitality plans to use a U.S. Small Business Administration fund to provide loans ranging from $5,000 to $35,000 for new businesses that can't meet the requirements of traditional lenders.
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Mark Edelman, Iowa State University Extension economist and director of the Community Vitality Center, said the microloans are intended to attack poverty by aiding new businesses with fewer than five employees.

"There is a gap in access to capital for loans of less than $50,000," Edelman said. "You oftentimes get into situations where many lenders just do not make small loans to entrepreneurs — particularly if it's something odd or different or the business plan is something that the loan officer might not be familiar with."

The Iowa Foundation for Microenterprise and Vitality is newly organized after a $500,000 grant from the Community Foundation of Greater Des Moines. The new center is intended to provide money for everything from inventory to refinancing start-up costs or expansions, Edelman said. Applicants also will be provided with coaching and other advice to help their business develop.

"This hopefully will be one tool that helps give them a step up," he said.

Source:http://www.desmoinesregister.com