Financing & Incentives
Muscatine has an excellent blend of financial institutions and funding opportunities that are able to meet the needs of your projects.
Small business facade GRANTS
If your business meets the requirements, you may be eligible for the Small Business Facade Grant. Grants, up to $5,000, must be used to make improvements to the facade of your establishment. Grants are reimbursable, meaning once approved you will purchase supplies or services, make the improvements, submit receipts, and then receive a reimbursement check. There are two types of grants available, one for within City Limits and the other specifically for the Grandview Corridor.
#MAKEITMUSCATINE STARTUP GRANT
Muscatine’s first and only startup grant funding initiative makes $1,000 investments into its early-stage entrepreneurs looking to take a great idea and turn it into action.
#MAKEITMUSCATINE MICROLOAN
What is a microloan? It is a short-term loan with a low-interest rate that is offered to self-employed individuals or small businesses with only a few employees. Use a microloan to solve the small issues that will help you do big things. Borrow amounts from $1,000 up to $10,000 for working capital, purchasing inventory, buying equipment, machinery and hiring needs. Repayment terms vary based on amount, needs of borrower and use of funds. Typical periods range from 12 months to 36 months. Microloans offer interest rates that are lower than traditional lenders average market rate.
Industrial Revolving Loan Fund
The Greater Muscatine Chamber of Commerce & Industry (GMCCI) manages an Industrial Revolving Loan Fund for eligible projects. This fund provides low interest loan money for economic development projects up to a maximum loan of $50,000. GMCCI will consider a loan for your project depending upon the complete and final information submitted regarding the proposed project and due diligence.
Mercer-Muscatine Revolving Loan Fund
The Bi-State Regional Planning Commission Mercer-Muscatine Revolving Loan Fund program targets businesses that cannot obtain full financing because of conventional interest rates and lending/exposure limits applied by local lending institutions. It is intended to provide the funds that complete the financial package by financing the ‘gap’ created by these conditions. The program offers low interest loans to industrial, commercial, light manufacturing, retail and service industries for expansion and development purposes. Funds can be used towards the purchase of fixed assets (land, building and equipment) and for working capital purposes.
More information about this program can be found on Bi-State Regional Planning Commission’s website here.
SMALL BUSINESS FORGIVABLE LOAN PROGRAM
The City of Muscatine is offering Small Business Forgivable Loans for building improvements and startup cost associated with the creation of a new business or to existing businesses significantly expanding into a new market, product or service. Businesses can obtain a loan for up to $25,000 for the business at a term of 5 years with 20% of the original loan forgiven annually at the anniversary of the origination of the loan. Funds are allocated up to $15,000 for startup cost and up to $10,000 for code compliance. Businesses receiving funding must be new businesses or be significantly expanding business operations to be eligible. Applicant must meet 1-to-1 match (applicant investment vs. grant funding) (may be waived in whole or in part by the City Administrator upon recommendation of the committee). Inventory is not an eligible grant funded expense but does count toward match.
The City has allocated $100,000 in funding annually. Funds will be awarded to qualifying businesses based on availability of funds. Loan agreement and documents must be finalized before any work on the project may begin. Work done prior to an executed agreement will not be eligible for funding.
Purpose
Promote in-fill and redevelopment in targeted areas throughout Muscatine.
Objective
– Improve Building Infrastructure
– Assist with Capital Equipment Purchases
– Offset Cost of Historic Building Preservation
– Offset Cost to Address ADA Access Issues
– Offset Cost of Fire Code Compliance, Sprinkler Systems, Egress Issues
– Allow Businesses to Allocate Additional Funds to Grow and Expand Business
TAX CREDITS & LOCAL INCENTIVES
GMCCI offers facilitation for businesses to gain access to the many incentives provided by the city, the county and the state. This service is intended to assist businesses start-up and mature businesses to grow while prospering within our communities.
Muscatine offers tax abatement and tax rebates of property taxes to qualifying companies. This is accomplished by the 5 year Industrial Tax Abatement or by creating an Urban Revitalization District that provides a 10-year tax exemption schedule. The community can create a Tax Increment Financing District and provide Tax Increment Financing by reallocating to the project company a portion of the property taxes generated that are an increase over the base valuation determined in the tax increment area.
The community has a designated Enterprise Zone intended to incentivize economic development in a given area of the community that provides tax abatement similar to the Urban Revitalization District.
Industrial Tax Abatement of 5 years is structured in a declining scale of taxes abated. The scale is 75%, 60%, 45%, 30%, and 15% and would be applied to the current levy. The levy is applied to every $1000 of value of the building and land assessment.
The Urban Revitalization District exemption and TIF require a resolution by the local government involved.
The Urban Revitalization District allows for partial real estate tax exemptions over a 10-year schedule. New construction qualifies for the tax exemption, as does renovation work that increases the actual value of commercial and industrial property by 15%.
The schedule of partial tax exemptions is as follows:
1st year 80% exempt
2nd year 70% exempt
3rd year 60% exempt
4th year 50% exempt
5th year 40% exempt
6th year 40% exempt
7th year 30% exempt
8th year 30% exempt
9th year 20% exempt
10th year 20% exempt
Tax Increment Financing (TIF) can provide funds up-front. The local government would sell TIF bonds that would be based on the projected assessment and the minimum assessment for the building construction agreed upon by the project company and the local government over a designated number of years. The TIF amount would be minus the area’s debt service portion of the taxes and it would be minus related bonding costs.
While a TIF payment is received up-front, the property taxes upon which this amount is based are paid annually by the project company. TIF can also be provided as a rebate. This structure has no bond issuance and requires that the project company pay the annual taxes due on the property. The local government then repays the company annually for the taxes paid minus the area’s debt service portion of the taxes. The Rebate is valid for the number of years agreed upon by the local government and is the TIF structure granted more often by the City of Muscatine.
The City of Muscatine has a policy to consider 50% of the TIF levy assessment annually for up to 10 years for an eligible project. Muscatine County does not have a specific policy.
Enterprise Zones allow for partial real estate tax exemptions over a 10-year schedule. New construction qualifies for the tax exemption, as does renovation work that increases the actual value of commercial and industrial property by 15%.
The schedule of partial tax exemptions is as follows:
1st year 80% exempt
2nd year 70% exempt
3rd year 60% exempt
4th year 50% exempt
5th year 40% exempt
6th year 40% exempt
7th year 30% exempt
8th year 30% exempt
9th year 20%exempt
10th year 20% exempt
Housing Revolving Loan Fund
The purpose of the Muscatine County Housing Development Revolving Loan Fund is to promote affordable housing in Muscatine County through both new construction and rehabilitation of existing housing. Permitted uses of the fund shall include, but not be limited to: the construction of new housing; the rehabilitation of existing housing stock; infrastructure development; interest rate buy-down and construction financing bridge loans to homeowners. In all cases, the projects will be designed to provide affordable housing for qualified households.
Your project’s eligibility for any of these programs and structures is subject to receipt of firm and final information regarding your project, due diligence, and is subject to approvals by the state and either the Muscatine County Board of Supervisors or the Muscatine City Council and State approvals. All costs and estimates herein are subject to the same conditions.
The State of Iowa offers a wide array of incentives to businesses. GMCCI provides support to businesses to access these programs from the state. To view the many programs offered by the state please go to Iowa Economic Development Authority’s website here.