WATERLOO - Judy Rousselow was working in her downtown beauty salon when the June 2008 floodwaters began filling the streets outside.

"At noon, I closed and started sandbagging with the rest of the building," said Rousselow, who has operated Judy's from the first floor of the Russell-Lamson Building for 17 years. "But it got into the basement, so we lost electricity, telephone, water, everything."

Like so many business owners affected by the natural disaster, Rousselow was forced to relocate temporarily, a move that runs up costs and risks the permanent loss of customers.

But a program through the Iowa Department of Economic Development and administered by the city government is helping businesses that rent bounce back from the flooding while encouraging other merchants to fill up space in flood-damaged properties.

City Council members on Monday approved funding 32 applications for businesses, including Judy's, which will receive grants equal to six months of rent. Another 14 applications are in the pipeline and will have committed about $660,000 of the city's initial $735,000 allocation.

Shane Graham, in the Waterloo Planning and Zoning Department, said interest has been strong in the program especially since it covers businesses which may not have been around when the floods hit but now are looking for a storefront.

Some property owners are using the program benefits in advertising their available space.

"It's set up to get businesses to relocate back into a flood-damaged buildings," Graham said. "You get six months free rent."

Grant awards have covered smaller businesses, including private law offices, to larger downtown businesses such as the Roux Orleans Bourbon Street Grill Restaurant and Bourre Lounge preparing to open in the Black's Building.

While the city may be down to the last $75,000 allocated through the state, Graham is encouraging businesses to continue applying because state officials have indicated additional funding may be available.

The rental assistance covers rents paid back to October 2008 and can be applied to future rents. It pays up to six months with a $50,000 cap. Applications are in the planning office on the second floor of City Hall.

Marilyn Rubino, who operates the Cedar Valley Fish Market at 218 Division St., said she is glad she applied.

"This is a tremendous help and is just an excellent program," said Rubino, whose business was shut down for two months in 2008 after water filled the basement, destroying coolers and seafood inventory.

While the Fish Market's customers were back in full force, the rental assistance program helped cover losses incurred during the shutdown.

"Just because the business comes to a standstill, the expenses do not," Rubino noted. "When you're in business, you've got orders coming in, orders you've placed in advance. This program gives us a little cushion for what we lost."