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If your business is majority-owned by a female, a person with a disability, or a minority, your business may qualify as a "Targeted Small Business" (TSB).  If the business meets the requirements of a TSB, you have the opportunity for certain preferential treatment in state-funded projects.  For example, certain projects may require a certain amount of work be completed by a TSB.  By qualifying as a TSB, you are placed on a central list where contractors and state agencies are able to locate you and seek your services as part of the project.  In addition, TSB's are given the opportunity to bid on certain projects 48 hours in advance.  TSB's also have the opportunity to seek financial assistance in the form of grants or low-interest rate loans.

The Iowa Department of Inspection and Appeals administers the TSB certification program and have the application materials posted on their website.  Also, the Iowa Department of Economic Development has additional general information on their site. 

If you have questions about forming your business or the TSB process in general, feel free to contact us.

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Many people understand that a corporation or limited liability company can provide its individual owners with protection from the debts of the company.  For example, if a company is unable to pay its vendors, those vendors are typically unable to go after the owners of the company for those debts.  Or if the company borrows money, the lender can only recover the debt from the company and not the owners/shareholders/members, generally.

However, if the owner of the company has provided a personal guarantee to that vendor or any other entity that has provided money or services to the company, the corporate liability protection is meaningless at that point.  Most guarantees don't require that the creditor look to the company first, but could look first to the individual providing the personal guarantee. 

If at all possible, an owner should avoid giving a personal guarantee when entering into any agreements.   Conversely, as a creditor, whenever dealing with a small business with limited operating history, you should demand a personal guarantee from the owner(s) of the company.

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My husband and I are in the early process of purchasing a business. After some searching, a couple hints from a friend and a newspaper article in the Des Moines Register we stumbled on the Targeted Small Business program offered through the Iowa Department of Inspection and Appeals and the Iowa Department of Economic Development. The TSB program is for Iowa businesses that are at least 51% owned and managed by minorities and/or women or persons with disabilities. One purpose of the program is to provide financial assistance in the form of low interest loans and/or grants to new or existing businesses.

The process (as I am currently discovering) does take a little work. First, you must become a certified TSB through the Iowa Department of Inspection and Appeals. The application requires information concerning you and the current and/or future business. Because our business is not yet established my husband and I will apply to be conditionally certified. Once we are up and running we can become fully certified.

Once certified (conditionally or fully), you are eligible to apply for the TSB Financial Assistance Program. The financial assistance application is a bit more involved than the certification application. A complete business plan, including projected financials is required. Those who have little or no experience in developing a business plan or projecting profits and losses can contact the Department of Economic Development and be assigned an assistant who will guide you through the process.

If you are a minority, woman or person with disability thinking about starting your own business or expanding a current business, you should consider the Targeted Small Business Program.

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