1. The purpose of this section is to provide for or facilitate the development of organizations, structures, or other entities organized to provide capital or technical or other assistance to start new Iowa businesses or to help existing Iowa businesses remain viable or expand through the incorporation under chapter 504A of a nonprofit corporation to organize, capitalize, and fund the following:
a. An Iowa-based small business investment company which shall have the purpose of increasing the availability of funds for investment in and loans to Iowa small businesses on a regional basis. The small business investment company shall be incorporated under the Iowa law.
b. An Iowa-based Iowa development bank or other community development entity organized to take advantage of the availability of federal programs, funds, guarantees, or other initiatives for the benefit of Iowa communities and small businesses.
2. In addition to the powers granted under chapter 504A, the corporation shall have the power to invest in the small business investment company and to serve as guarantor of the preferred stock of the small business investment company.
In exchange for the guaranty, the corporation shall receive warrants for a percentage of the preferred stock of the small business investment company. The guaranty shall expire ten years after the guaranty agreement is entered into. The corporation shall only be liable as guarantor in the event that capital replenishment becomes necessary due to federal small business administration requirements or in the event of a capital loss upon liquidation of the small business investment company.
92 Acts, ch 1244, § 30; 93 Acts, ch 180, §43
Referred to in § 15E.171
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