Iowa incentivizes the creation of ESOPs to retain businesses. Companies with an ESOP can sell the business to its employees when the owners retire or start a new business. An ESOP allows owners to share equity with employees and provides a retirement plan for those employees.
The Iowa Economic Development Authority (IEDA) helps Iowa business owners complete the first step of setting up an ESOP - a feasibility study conducted by an independent financial professional.
- Reimburses 50% (not to exceed $25,000) of the cost incurred to obtain a feasibility study
- Reimbursement is dispersed in two stages: half is released upon conclusion of the feasibility study and the remaining half after successful formation of the ESOP
Eligibility
- Must be an Iowa-based company
- Applicants who have completed a feasibility study prior to applying are not eligible
- Retail businesses are not eligible
- Business structures other than corporations are not eligible; businesses that intend to become a corporation as part of a potential transition to an ESOP, may provide a letter of intent describing plans to incorporate
Application Process
- Review the application instructions.
- For applications submitted on or after March 29, 2023, only feasibility costs incurred after approval of financial assistance may be reimbursed.
Resources
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