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Small Business Loans in Iowa (2021 Update)

While Iowa may not be the top entrepreneurial state in America, there are still over 250,000 small businesses state-wide. A good majority of business owners within the state require some type of small business loan to get their companies established and running. A loan is an essential form of cash flow that can save a company from failing or enable expansion of their services.

When to Take Out a Business LoanSmall Business Loans in Iowa

The best time to take out a small business loan is if you're an entrepreneur and need a large lump sum of money. You might have plans to use that money to expand your company or put cash into marketing and advertising to bring in more customers. Alternatively, your plan for the loan money might be to save your failing business. Whatever your objectives are, have a clear goal in mind before receiving the cash from the loan. Loan agreements are long-term contracts that will need to be paid back in full with interest. If you squander the money away and don't use it for your company's essential needs, you'll only regret it in the end when your business suffers.

Applying for a Loan

The lender of your choosing will need business-related documents that provide them valuable information pertaining to your company's assets. Lenders won't approve loans for companies that are brand new, high-risk or work in a niche market. If you have a bad credit score or have business delinquencies filed against you, don't count on being approved by a bank with a good rate. This isn't to say that you won't be approved for a business loan at all, but that you'll more than likely get locked into a higher interest rate. Most banks will have an approval turnaround time of roughly 45 days to two months.

Usage and Repayment

Once you've been approved, the money from the loan will be deposited directly into your chosen bank account. Repayment of the loan starts immediately upon receiving the money. Most business owners find it easier to set up automatic withdrawal payments so they don't have to remember to pay the loan bill. The interest will automatically be integrated into your loan payment, which causes the loan to total more in the long run than what you received. The interest is how lenders make their money off of loans in general. Business loan rates range from five to eight percent, and the rate you receive depends on your company's liability factor and credit report.

Banks in Iowa That Offer Small Business Loans

To get a small business loan, here are the top banks to get you started:

Libertyville Savings Bank

Having been in operation for more than 115 years already, Libertyville Savings Bank has maintained the same level of customer service and banking experience throughout the years.

Houghton State Bank

Empowered by the local community and its humble beginnings, Houghton State Bank is dedicated to providing a personal service to anyone who walks in their doors with their wide array of financial services.

Farmers Trust and Savings

Founded on 16 May 1914, Farmers Trust and Savings started out with $249,800 in total assets during its first year of operation. It has since grown after more than 100 years in the business with total assets exceeding $250 million.

First Central State Bank

The First Central State Bank opened on 12 June 1967 in DeWitt through the initiative of local business owners. Today, it has expanded to offer its services in other parts of the state, offering the same quality and dedication as it has since day one.

Ohnward Bank and Trust

Founded in 1902 by a group of local businessmen, Ohnward Bank and Trust has only continued to grow ever since, acquiring many local banks in the process.

American State Bank

Founded in the spring of 1987 by five families in Southern Iowa, American State Bank opened at the troughs of economic struggle yet managed to succeed with vision and dedication.

    Top Cities in Iowa and Their Lenders

    Iowa is one of the most famous states in the Midwest. The area was traditionally known for its role in America’s agriculture industry, but recent years have seen a switch towards a more diversified and modern economy. As much of Iowa isn’t as urban as the rest of the nation, there is plenty of space for new small business owners to begin operations. If you’d like to start a business in the Iowa region, there are several cities at your disposal.

    In this portion of the article, we will take a look at the top cities in the area for small business owners. We’ll also take a look at the local lenders in each city that work well with small business owners.

    Des Moines, Iowa

    Des Moines is the capital of the state of Iowa. While it has a reputation as a Midwest city, Des Moines is actually much more modern than you may think. The area has come to be one of the most recognized business cities in the country – the city has won numerous awards. If you’re looking for a place to start a business, this should be your first stop in Iowa. The top business lenders in the area are listed below:

    Des Moines Metro Credit Union

    If you want a lender that has local experience, there aren’t many better options than Des Moines Metro Credit Union. This local lender has experience working with a variety of companies in the area. They provide SBA loans, lines of credit, and real estate loans for their business customers.

    Bankers Trust
    Bankers Trust is another small business lender with a large presence in the Des Moines region. They have the power to deliver any type of financing that you may need as a Des Moines business owner. They’re highly recommended by past clients.

    Cedar Rapids, Iowa

    Cedar Rapids is the second largest city in the state of Iowa. The area has become famous for its role in the food processing industry. It has some of the largest food processing plants in the country. If you’re thinking of starting a new business in the area, below is a good list of lenders to work with:

    Kerndt Brother Business Banking

    Kerndt Brother Business Banking is the perfect Cedar Rapids lender for anyone who wants a business lender that truly understands the local economy. The firm is located in the heart of Cedar Rapids – they like to meet personally with their clients to help develop funding strategies that work for their business partners.

    Cedar Rapids Bank & Trust

    Cedar Rapids Bank & Trust is another local lender with a large client base in the region. They also offer banking services to their customer base. If you’re looking for someone who can provide you with full-service banking and lending, this is one of your top options.

    Davenport, Iowa

    Davenport is the manufacturing capital of the state of Iowa. It plays home to some of the largest manufacturing centers in the nation. If you’re interested in this industry, it’s a great place to start a business. Below is the top lender in the Davenport region:

    Northwest Bank and Trust

    Northwest Bank and Trust is a regional bank that seems to dominate the business lending scene in Davenport. If you want a business with experience in the area, choose Northwest Bank and Trust.

    Sioux City, Iowa

    Like Cedar Rapids, Sioux City is famous for its role in the food processing industry. It’s a very affordable place to live if you’re looking for a cheap city to start a business in. The lender we suggest in the area is provided below:

    Iowa-Nebraska State Bank

    Iowa-Nebraska State Bank is a regional bank that provides services to certain areas in both Iowa and Nebraska. They’re a great lender if you want someone that can provide you with both commercial lending and commercial banking services. They have a good reputation in the area.

    Iowa City, Iowa

    Iowa City lends its name to the state that it’s located in. It’s home to the University of Iowa – much of the local economy is built around the university. If you’re thinking of moving to Iowa City, the lender below is your best financing partner available:

    Hills Bank

    Hills Bank provides small business lending services to businesses throughout the Iowa City region. If you’d like to work with one of their small business lending specialists, you can visit them in-branch at their Iowa City location.

    Waterloo, Iowa

    Waterloo is an outside suburb of Cedar Falls – it also benefits from the food processing industry. We recommend the below lender for your business financing needs:

    Kerndt Brother Business Banking

    Although mentioned previously, Kerndt Brother Business Banking is still our most recommended lender for the Waterloo, Iowa region. As Waterloo is extremely close to Cedar Falls, it’s only natural we suggest the larger city’s top lender for Waterloo as well.

    Ames, Iowa

    Iowa State calls Ames home – much of the local economy is driven by the school. As with all college towns, there are plenty of business opportunities available. Check out our recommended lender below:

    River Valley Credit Union

    River Valley Credit Union is a small credit union with a local presence in the Ames, Iowa region. Although your financing choices are quite limited in Ames, River Valley Credit Union has a solid reputation for working with business owners in the area. They understand the local economy well.


    Remember, some of these companies or banks are very specialized and may only handle SBA loans or a business line of credit. Ask them about any special programs for minorities or women. Also ask for information about business grants for startups if that interest you. If you bad credit don't worry as there still may be other alternative lenders willing to work with you.