New assistance programs offered for flood-affected businesses

The Rebuild Iowa Office announced new programs Wednesday that will help flood-affected businesses pay for damaged equipment and flood insurance premiums.

The new Equipment Reimbursement Assistance Program will provide up to $75,000 for equipment lost by businesses that owned their own building or leased rental space during the 2008 disaster.

Equipment awards are limited to 75 percent of replacement cost, not to exceed a total of $75,000 per business. Eligibility also requires that the business must have sustained physical damage to machinery, equipment, furniture, inventory or supplies.

The Flood Insurance Reimbursement program provides funds to reimburse businesses for the cost of one year of flood insurance.

To be eligible, the businesses must have had water in their building from overland water flow or sewer backup as a result of the 2008 disasters, and/or be located in the 100 or 500-year flood plain. Businesses that moved into the either flood plain after the disaster may also be eligible under the second criteria.

The flood insurance policy start date must fall between Jan. 1, 2010 and Dec. 31, 2010. In-home businesses are not eligible, according to the Rebuild Iowa Office.

The funds will be awarded on a first-come, first-served basis. In-home businesses and businesses on upper floors of disaster impacted buildings that didn't sustain physical damage to equipment are not eligible.

New duplication-of-benefits restrictions relative to private bank loans apply to the Equipment Reimbursement Assistance Program, according to Theresa Bornbach, JumpStart program administrator in Cedar Rapids.

The U.S. Department of Housing and Urban Development added bank loans to the list of funding sources to disaster-affected businesses that will be used to offset grant assistance late last month, Bornbach said.

Cedar Rapids Small Business Recovery Vice President Doug Schumacher said the HUD interpretation is being questioned by the the group. He said the decision could have the effect of impeding  the cash flow of businesses struggling to recover.

“The overall effect will be horrible,” Schumacher said. “I don't know how they can even justify this requirement.

Does a private bank loan come from the government?” Schumacher asked. “Is the next step going to be considering it a duplication of benefits if you borrow money from your personal retirement account?”

JumpStart officials are working with HUD and the Iowa Department of Economic Development in an effort to ensure that the new criteria will not require flood-affected businesses that already received money from JumpStart programs under the old criteria to relenquish any of their JumpStart funds.

More than $117 million in Community Development Block Grants from HUD have been allocated for business asssistance programs relating to the 2008 floods and tornados in Iowa. Of that amount, nearly $60 million has been approved. More than $32 million has been spent.