Section 9 - Grants, Loans and Others
updated 2009
U.S. Small Business
Administration Program and Services -- Website:
www.sba.gov/
North Dakota District Office - 701-239-5131 or website:
http://www.sba.gov/localresources/district/nd/index.html
657 2nd Ave N, Room 218
PO Box 3086
Fargo ND 58105-3086
E-mail: north.dakota@sba.gov
Loan Programs
http://www.sba.gov/services/financialassistance/sbaloantopics/index.html
The U.S. Small Business Administration (SBA) is an independent
agency of the Executive Branch of the Federal Government. It is charges with the
responsibility of providing
assistance to American Small Business by providing financial assistance. This
financial assistance comes through Business Loan programs, Investment Programs,
and
Bonding for Contractors.
SBA is not an originating lender. The actual funds are provided by independent
lenders, Community Development Organizations or Micro-Lending Institutions. The
lender receives the full faith and credit backing of the Federal Government on a
portion of the loan made to the small business and SBA transfers the risk of
borrower
non-payment, up to the amount of the guaranty, from the lender to SBA.
For additional information on any of the SBA Loan Guaranty Programs call 701-239-5131 or www.sba.gov/nd/financing.html
7(a) Loan Guaranty
The 7(a) Loan Guaranty Program is the most basic and used type of SBA's business
loan programs. To qualify for an SBA loan, a business must be small according to
SBA
size standards; and must be organized as a far-profit business; and must provide
a product or service. Businesses involved in speculation or for investment
purposes such as
rental properties are not eligible for SBA assistance. The maximum loan amount
is $2 Million and SBA's maximum guaranty is 75% and varies based on the project.
Funds can
be used for start-up or expansion, equipment purchase, working capital,
inventory and real estate acquisition. The interest rate and terms are
determined by the lead lender
and equity requirements are typically standard for that type of industry.
The 504Certified Development Company Program
The 504 Certified Development Company Program is a partnership
between a certified development corporation (CDC) backed by the SBA, a local
lender, and the
applicant to finance long term fixed assets such as equipment and land. The
applicant injects 10-20% of the project; the bank finances 50% of the project;
and the
CDC finances the balance (30-40%) by selling debentures guaranteed by the SBA.
The SBA's share is limited to a maximum of $1,000,000 depending on the project.
Contact the Dakota Certified Development Corporation at
www.dakotacdc.com or (701)293-8997
/ 800-611-8997 for further details.
Microloan Program
The Microloan Program works with an intermediary who can lend up to $35,000
directly to an eligible small business. The program is designed to provide
commercial
financing to small businesses that can't get financing through a bank because
the loan is too small. Applicants must be creditworthy and meet SBA's
eligibility guidelines.
Contact the Lake Agassiz Regional Development Council (701)239-5373 or Contact
the Dakota Certified Development Corporation at
www.dakotacdc.com or
(701)293-8997 / 800-611-8997 for further details.
CAPLine
CAPLine are specialized loan programs designed to meet a business's short term,
cyclical working capital needs. The maximum loan amount is $2 million and is
available
in five lines (1) Seasonal Line (2) Contract Line (3) Builders Line (4) Standard
Asset Based Line (5) Small Asset Based Line. Loan proceeds generally will be
advanced against a borrower's anticipated inventory or accounts receivable.
SBA Express
SBA Express is a program designed to offer fast and easier access to SBA loan
guaranty programs. Lenders who have been qualified by SBA may electronically
submit a loan request, using their own forms and underwriting standards to
receive a 50% guaranty. The maximum loan amount is $350,000. Loan proceeds
can be used for working capital, equipment and real estate.
Equity Investment
Small Business Investment Companies (SBIC's) are privately owned and managed,
for profit investment firms licensed by the SBA. They make equity investments,
and long-term loans to small businesses using their own capital leveraged with
SBA funds. Companies seeking rapid growth, modernization and expansion are
good candidates for this program. Contact Invest America (701) 298-0003 for
further details.
Surety Bond Guarantee
By law, prime contractors to the federal government must post surety bonds on
federal construction projects valued at $100,000 or more. Many states, counties,
municipalities, and private-sector projects and sub contracts also require
surety bonds. The SBA Surety Bond Guarantee (SBG) provides small and minority
contractors with contracting opportunities for which they would no otherwise
bid. SBA can guarantee bonds for contracts up to $2 million, covering bid,
performance
and payments bonds. The SBA's guaranty goes to the Surety Company and
contractors must apply through a surety bonding agent.
Procurement Marketing
The U.S. government is the world's largest buyer of products and services. By
law, federal agencies are required to establish contracting goals, such that 23%
of all government buys are intended to go to small businesses. In addition,
contract goals are established for women-owned, small disadvantaged businesses,
firms located in HUB Zones and service disabled veteran -owned businesses.
Selling to the government is similar to selling to the private sector but with a
new set of rules and regulations. Use common business sense and look closely
at your company and what the government will consider before choosing you as a
vendor -your financial status, staff capabilities and track record. Information
on procurement and other opportunities are available at
www.sba.gov/nd/opportunities.html
Research & Development Assistance
The Small Business Innovation Research (SBIR) program awards federal grants,
on a competitive basis, to small businesses with innovative ideas that meet the
specific research and development need of participating federal agencies. The
Small Business Technology Transfer Program (STTR) also awards federal
grants on a competitive basis but for profit companies must collaborate with a
nonprofit research institution from the submission of the proposal to the
completion of the designated effort. In North Dakota contact the Center for
Innovation & Business Development
www.innovators.net/sbir.htm 701-777-3132.
Business and Industry (B&I) Loan Guarantees
Any legal entities, including cooperatives, individual, public and private
organizations and federally recognized Indian tribal groups are eligible. A lead
lender is
required and Rural Development (RD) can guarantee loans up to $25 million and
there is no minimum loan amount Priority is given to application for loans in
rural
communities, projects in areas of high unemployment, and to projects, which show
a low amount of investment per job, created or saved.
For more information check the website: http://www.rurdev.usda.gov/rbs/busp/b&i_gar.htm
Business and Industrial (B&I) Direct Loans
Any legal entity can borrow for a business loan in area of population up to
50,000. Other credit must be considered before a direct loan is made at treasury
interest
rates for eligible projects. The maximum loan is $10000,000 from Rural
Development.
Rural Business Enterprise Grants
The Rural Business Enterprise Grants program provides for rural projects that
finance and facilitate development of small and emerging rural businesses help
find
distance learning networks, and help fund employment related adult education
programs. To assist with business development, RBEGs may find a broad array of
activities.
RD-Intermediary Relending Program (IRP)
The purpose of IRP is to finance business facilities and community development
projects in rural areas. This is achieved through loans made by Rural Business
Cooperative
Service (RBS) to
intermediaries. Intermediaries re-lend funds to ultimate recipients for business
facilities or community development. Intermediaries establish revolving loan
funds so collections from loans made to ultimate recipients, in excess of
necessary operating expenses and debt payments will be used for more loans to
ultimate recipients.
Eligible Loan Purposes
- Business and industrial acquisition, construction, conversion, expansion,
repair, modernization, or development costs.
- Purchase of equipment, machinery, or supplies
- Start-up costs and working capital.
- Processing and marketing facilities.
- Pollution control and abatement.
- Refinancing for viable projects, under certain conditions.
Rural Business Opportunity Grand (RBOG)
The purpose is to promote sustainable economic development in rural communities
with exceptional needs. This is accomplished by making grants to pay costs of
providing
economic planning for rural communities, technical assistance for
rural businesses, or training for rural entrepreneurs or economic development
officials.
Intermediary Relending Program (IRP)
The purpose of the IRP program is to alleviate poverty and increase economic
activity and employment in rural communities. Under the IRP program, loans are
provided to
local organizations (intermediaries) for the establishment of revolving loan
funds. These revolving loan funds are used to assist with financing business and
economic development
activity to create or retain jobs in disadvantaged and remote communities.
Intermediaries are encouraged to work in concert with State and regional
strategies, and in partnership
with other public and private organizations that can provide complimentary
resources.
How much are the loans?
An intermediary may borrow up to $2 million under its first financing and up to
$1 million at a time thereafter. Total aggregate debt is capped at $15 million.
In recent years, loans
to intermediaries have been capped at $750,000. Ultimate recipients may borrow
up to $250,000.
What organizations are eligible to become an intermediary?
Private non-profit corporations, public agencies, Indian groups, and
cooperatives with at least 51 percent rural membership aimed at increasing
income for producer members
or purchasing power for consumer members may apply for intermediary lender
status. For more information go to:
http://www.rurdev.usda.gov/rbs/busp/irp.htm
The Dakota Certified Development Corporation
http://www.dakotacdc.com/
504 Program - The 504 Program is intended to create and retain jobs through
long-term financing of real estate and equipment at a fixed below-market
interest rate. Through
the CDC, SBA may guarantee up to 40 percent of the total project costs, or from
$50,000 to $750,000 (up to $1 Million in certain cases). The business receiving
the
financial assistance must inject at least 10 percent of the total funds for
any project. The balance, usually 50 percent is provided by the local financial
institution.
Funds are provided for fixed asset financing (land and buildings and in some
cases equipment). For more information on 504 Program go to:
http://www.dakotacdc.com/
Women's Prequalification Loan Program
http://www.sba.gov/services/financialassistance/sbaloantopics/prequalification/index.html
Prequalification loan funds can be used for typical business purposes, such
as working capital, debt payment, equipment and inventory purchases,
construction, and real
estate purchases. Proceeds may not be used for distribution to principals or to
pay personal debt. To be eligible, the business must: (1) be at least 51 percent
owned and
managed by women, (2) meet
SBA
7(a) Loan Guaranty Program size standards and general eligibility
requirements, and (3) cannot be engaged in speculation or
investment in rental real estate. The Dakota Certified Development Corporation
is an intermediary for the US Department of Agriculture's Rural Development
Intermediary Relending
Program and also provides loan application assistance for participation in
the US Small Business Administration's 7 (a) Loan Guaranty Program.
North Dakota Department of Economic Development and
Finance
http://www.growingnd.com
ND Development Fund
This fund provides financing for primary sector businesses to included
value-added agriculture, manufacturing, and exported services. The fund is a
secondary source of
financing, subordinate to private sources. If a business can't handle added
debt, the Development Fund can take an equity financing position. The fund
provides "gap
financing" through loans and equity investments not available from most
conventional lenders and is available to any primary-sector business with the
exception of production
agriculture. The Development Fund also administers the Regional Rural Revolving
Loan Fund, which provides funding for primary-sector projects located in a
community
of less than 8,000 in population or located more than five miles outside the
city limits. Go to Website for more information:
http://www.growingnd.com
Agricultural Products Utilization Commission (APUC)
http://www.business.nd.gov/businessInformation/apuc/
The fundamental mission of APUC is to create new wealth and jobs through the
development of new and expanded uses of North Dakota agricultural products and
resources.
A maximum of 15 qualifying applicants present funding proposals on a quarterly
basis:
- basic and applied research grants
- marketing and utilization grants
- farm diversification grants
- agricultural prototype development grant program
Farm Diversification Grant Application
The North Dakota Agricultural Products Utilization Commission (APUC)
invites you to apply for a farm diversification grant. Priority is given
to projects dealing with the
diversification of a family farm to non-traditional crops or livestock or
on-farm value-added processing of agricultural commodities. Traditional crops
and livestock are
generally defined as those for which the North Dakota Agricultural Statistics
Service, regularly reports, maintains statistics. The proposed project must have
the potential to
create additional income for the farm unit. Sustainability of the new venture is
considered. Already existing diversification enterprises are eligible if the
project proposal is to
significantly expand or otherwise upgrade the enterprise and if the project has
not received prior funding from APUC.
To qualify for a Farm Diversification Grant you must be a current producer (25
head of cattle of more, and/or 100 acres or more and 51% of your total income
must come
from on farm operation).
~ Proposals must demonstrate a well-prepared plan of
action to offer the commission.
~ Markets for the product must have been researched and
possible income must be projected.
~ New and innovative plans for marketing products must
also be evident.
~ A sound business plan must show potential profits
from diversifying.
Applicants applying for these grants can receive help from and must receive a
letter of endorsement from one of the following agricultural specialists,
indicating that they
have reviewed the projections in the grant request: Adult Farm Management
Instructors; Agricultural Loan Officers; Agricultural Mediation Service
Negotiators; County
Agents; Local Economic Developers; RC&D Coordinators and Regional Councils
The Applicant Advisor/Fiscal Agent may charge a 5% fee for help received. Use
any of the above listed individuals; the fee should be included in the proposed
budget.
Generally Farm Diversification grants will not exceed $5,000 per application,
plus 5% Fiscal Agent Fee. Grant funds will be paid in two separate installments.
Grantees
will be requires to submit a final written report prior to the final
disbursement; the results will be made available to other farmers. Each
project will be considered on an
individual basis and on its own merits. Click here for
Farm
Diversification Grant Form. Please submit 2 copies of the Farm
Diversification application form.
(If additional space is needed, please attach separate sheets) The Commission reserves the right to reject any
Grant application
http://www.business.nd.gov/businessInformation/apuc/apuc-forms/
Nature Based-Agri Tourism
Definition:
Nature Based Agri-Tourism is a segment of rural tourism sometimes
referred to as ecotourism, for APUC purposes an eligible business is defined as
one which seeks
to attract visitors to a working farm or any agricultural, horticultural or
agribusiness operation to enjoy, be educated or be involved in activities.
Nature Based Agri-Tourism enterprises are designed to bring people to rural ND
to engage in a recreational, sport, educational or labor assisted sales (self
harvesting)
activity. Eligible facilities must provide restroom facilities, fresh water for
sanitation, and other appropriate accommodations. These activities MUST be fee
based and
provide primary or secondary sources of economic activity. APUC realizes that
these activities may be sporadic, seasonal, or fairly small in scope.
Example of Eligible Projects:
Eligible projects under the Nature Based Agri-Tourism grant include
but are not limited to the following:
Examples of Non-Eligible Projects:
Non-eligible projects under the Nature Based Agri-Tourism grant
include but are not limited to the following:
Parameters:
Funding for Nature Based Agri-Tourism is normally restricted to
marketing and advertising dollars for individuals or preferably groups
of individuals or companies,
who are currently engaged in an eligible tourism activity. Projects are
encouraged to work together and apply for grant dollars to promote and
entire region, thus,
multiple businesses are given high priority. Grants will be awarded as
follows: (applies for individuals or companies)
1.1 Enterprise = up to $1,000
2. Two Enterprises + up to $2,500
3. Three to five Enterprises + up to $6,500
Nature Based Agri-Tourism Grant Form is available at this site:
http://www.business.nd.gov/businessInformation/apuc/apuc-forms/
Bank of North Dakota - North Dakota's
Development Bank
Bank of North Dakota --http://www.banknd.com
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5671
1-800-472-2166 ext. 5671
TDD (Telephone Device for the Deaf) 1-800-643-3916
Business
Financing Programs
Starting or expanding a business can be a real challenge. The challenges range
from choosing the best location, equipment, or employees, to securing the
financing you need.
Bank of North Dakota offers a number of programs which are specifically intended
to make your bank financing easier to access, and less expensive.
In participation with a local financial institution, BND's loan programs are
available to fund the purchases of real estate or equipment, as well as to
finance operating funds to
carry the cost of inventory and accounts receivable.
The Business
Development Program is available to assist the beginning or expanding
business that has funding needs. This program also allows refinancing of debt.
BND
offers attractive, variable and fixed rate options under this program.
The Beginning
Entrepreneur Guarantee Program is a second option intended to help the
beginning business person. The Guarantee Program will provide an 85 % guarantee
to financial institution willing to make a loan to assist in the start-up or
expansion of a business enterprise. The loan amount may not exceed $100,00.
The Pace Program
is available to finance the purchase of equipment or real estate, as well as
term working capital. In conjunction with community support, the program
provides an interest buy down that can reduce the borrower's rate of interest by
as much as 5%. This buy down can mean an interest savings of approximately
$385,000
over the term of the loan. In return, the borrower must create 1 new job in
North Dakota for each $100,000 of total loan proceeds.
The PACE Program
was expanded to include two new programs with similar traits to the PACE program
Flex PACE was designed to provide interest buy down to
non-PACE qualifying businesses where the Community determines eligibility and
accountability standards. Flex PACE targets essential community businesses
without
the job creation requirement.
Biofuels PACE
(Biofuels Partnership in Assisting Community Expansion) was established
to buy down the interest rate on loans to biodiesel and ethanol production
facilities, livestock operations, biofuels retailers, and grain-handling
facilities.
Commercial Bank Participation
is founded on principles that all loans
should serve legitimate credit needs of the State and be made on a sound and
collectible basis.
BND will consider a broad range of loan applications. Specific equity
requirements have not been established. Each loan will be reviewed on its own
merits.
Adequate collateral will generally be required to protect the interest of BND.
The New Venture Capital Program is an innovative financial program that
provides flexible financing through debt and equity investments for new or
expanding businesses
in the state of North Dakota. BND can fund rapidly growing companies which
require equity funding.
The Bank may provide funding for early stage companies which can show clear
proof of completed product development and market acceptance as evidence by
growing sales. The Bank will invest in a variety of technologies and types of
businesses, including North Dakota Department of Commerce strategic target
industries.
BND will also invest in growth and later stage manufacturing, service and
businesses with profitable growth potential.
The
Ag PACE Program (Agriculture Partnership in Assisting Community
Expansion) - This program provides interest buy down on loans to farmers which
are investing
in nontraditional agriculture activities to supplement farm income. The program
funds are used to reduce the interest rate on loans which have been approved by
a local
lender and BND. The farmer shall have as his principal occupation, prior to
applying for the program, the production of agricultural commodities or
livestock.
Qualified businesses include any activity which is conducted by the farmer or
the farmer's family and which is integrated into the farm operation. These
businesses include
nontraditional agriculture, manufacturing, processing, value-added processing,
and targeted services industries.
The BND links provide other sources of financial and technical assistance to
help you in developing your business. They have the resources to help you deal
with some of
the other challenges that face your business.
One Stop Capital
Center
"Your Network to Financing Programs"
(701) 328-5850 / 1-800-544-4674 Website: http://webhost.btinet.net/~onestop
Business Information Center call 1-(800) 544-4674 e-mail:
afbehm@btinet.net
The One Stop Capital Center is a partnership effort between federal, state
and private sector resources. Through a coordinated plan we provide financial
assistance to
individuals starting, buying or expanding a business enterprise.
Located at Bank of North Dakota, The One Stop Capital Center offers one-stop
access to over twenty financing programs. Together, the partners work with
local
financial institutions and economic developers to offer integrated
financial packages. The One Stop Capital Center has loan officers from each
of the agencies who work jointly
to streamline the financing process and
provide timely service.
The One Stop Capital Center is proud to work with other resource service
providers including:
USDA/Rural Development
http://www.rurdev.usda.gov
Bank of North Dakota (BND) http://www.banknd.com
US Small Business Administration (SBA)
www.sba.gov/
Dakota Certified Development Corporation
http://www.dakotacdc.com/
North Dakota Economic Development & Finance (ED&F) -
www.growingnd.com
SCORE Service Corps of Retired Executives (701) 239-5687 -http://www.score.org/index.html
SBDC - Small Business Development Centers - 1-800-445-7232
http://www.ndsbdc.org/about
entrepreneur - Center of North
Dakota (ECND)
http://www.ecnd.org/
PO Box 5509, Bismarck, ND 58506
701-328-5850/ 1-800-544-4674
Entrepreneur Centers of North Dakota is working together,
neighbor to neighbor, across the prairies of North Dakota. ECND is an effort of
local, state, and federal resource
providers who offer access to over twenty financing program and a network of
organizations who offer counseling, training, and assistance to North Dakota's
start-up
and existing entrepreneurs. The goal of this group if to work jointly with
business people, lenders, economic developers and communities to streamline the
financing process
and provide timely service to borrowers. The Entrepreneur Centers of North
Dakota also offer access to counseling, technology, training, and business
related materials
designed to assist start-up and expanding businesses.
The ECND provides the following information sites relating to:
Small Business Development Center
(SBDC)
(701) 777-3700 or toll free 1-800-445-7232 Website:
http://www.ndsbdc.org/about
The North Dakota Small Business Development Center has 10 centers throughout
North Dakota with experienced counselors along with an excellent staff of
business
professionals. We offer on-line training classes on small business grants and
building market research for your business plan with new classes being added. As
our motto says,
"Your Ideas, Our Expertise, Your Success" We are here to see
your business dreams become reality.
The Small Business Development Center (SBDC) is currently the largest management
and technical assistance program serving the small business sector in the United States.
Check out their website
http://www.ndsbdc.org/about for
topics that will assist you in planning and establishing your business. You can
get information about what you should
do and what you need to do. This includes
business planning, licensing, registering your business name, sale tax
requirements, protecting your business and other state requirements.
SBA offers
you a tutorial on preparing a solid plan with all its essential ingredients.
Visit the SBA's Small Business Classroom, "The Business Plan" the first step on
the road to success
with guidelines and instructions on how to write a business
plan.
And SBDC conducts research, counsels, and trains business people in managing,
financing, and operating small businesses. Each SBDC encourages unique local
efforts to meet small
business needs in its area. SBDC's develop and maintain
partnerships connecting broad networks of public and private resources. SBDC
partnership programs and activities serving
small businesses have contribute
significantly to economic growth in each state.
Objectives:
North Dakota State University
NDSU Extension Service