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DES MOINES, Iowa – Iowa credit unions may be able to play a part in helping small businesses go to another level. During the week of March 13, the Iowa House passed a resolution that provides enhancements to a current program. The Linked Investment for Tomorrow or LIFT program uses credit unions and banks to offer a discount on interest rates to eligible small businesses, said Rep. Bob Kressig (D-Cedar Falls), who is also a director at $1 billion Veridian Credit Union. Under the enhanced program, the Iowa Treasurer provides the funding for a loan by purchasing a “below market rate” certificate of deposit from a financial institution. The credit union or bank then makes a loan to a qualified borrower and passes on the preferred interest rate to the borrower. The savings to the qualified small business can be as much as 3% below the market rate. Under House File 2661, the minimum rate of interest the state can receive on the CD would be 1%. Previously, it was 2%. To qualify, a business must have a combined net worth of under $750,000. Since its inception in 1986, the LIFT program has provided more than $84 million to nearly 3,000 small businesses. Iowa’s Senate Economic Growth Committee would have to pass the bill for it to remain alive for the 2006 legislative session, according to Kressig.

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