"It's a short-run, contract machine operation," he said. "We do prototypes for clients like Sauer-Danfoss and Barilla."

During all that time, Damann hasn't had a place to talk with clients, other than the shop floor itself.

So, this year, he went out and got a loan secured by the Small Business Administration and added a front office to the place.

The $140,700 loan is among hundreds made by the SBA in the state of Iowa during the federal fiscal year of 2008 (Oct. 1, 2007 to Sept. 30, 2008), according to a report released Oct. 27 by the agency's Des Moines office.

There were 23 loans for a total of $5.43 million in Story County, according to Dave Lentell, business development specialist with the SBA.

In all, Iowa businesses received 741 loans for nearly $190 million during fiscal 2008.

"Without the Small Business Administration, I wouldn't be able to operate," said Jonathan Reed, owner of The Stomping Grounds, 303 Welch Ave., Ames.

Last year, Reed's business was able to get two loans for $220,000, which financed "a much bigger and more efficient kitchen" in the coffee shop/restaurant, located close to the Iowa State University campus, he said.

The SBA is backing 75 percent of the loans to the Stomping Grounds, which were advanced by private lenders, Reed said.

"I've been in business eight years, and I was 25 years old when I started," he said.

"At that age, it's hard to find investors or banks willing to lend."

But with government-backed loans, the Stomping Grounds has grown to four times its original size, can seat 100 people indoors (and more than 200 with outside seating), and employs 35 to 40 full- and part-time workers, Reed said.

According to Lentell, SBA loans are no longer subsidized by taxpayer funds.

"We used to have a lending limit allocated by Congress, and when it was exceeded, we closed down loans for the remainder of the (fiscal) year," he said.

Now, the SBA offers to back loans secured through private lenders according to their guidelines, he added.

A slowing economy is having its effects. The agency approved 822 loans in fiscal 2007 - 81 more than this year.

"The number of loans is lower this year than it has been, but the dollar amounts are higher," Lentell said. Loan activity went on because the worldwide credit crunch "isn't as serious here as it is in other parts of the country," he added.

"Things have slowed down as banks have tightened their lending guidelines," Lentell said. "And fewer people are choosing to start a business in this economy. But those who can find that they can, get (SBA-backed) loans."

Among the borrowers are Bobbi and Neal Dollinger, the new owners of Quality One Commercial Cleaning, Ames. They borrowed $922,000 to buy the business, which employs 23 people and cleans offices and stores for about 50 clients in Ames.

Neal Dollinger said his wife is a 51 percent owner of the business, which enabled the couple to qualify for one of the 128 SBA-backed loans made last year to Iowa businesses owned by women.

Bob Zientara can be reached at (515) 663-6961, or rzientara@amestrib.com.