Section 9 - Grants, Loans and Others
Business and Industrial Loan Guarantees
The Business & Industry (B&I) Guaranteed Loan Program helps create jobs and
stimulates rural economies by providing financial backing for rural businesses.
This program provides guarantees up to 80 percent of a loan made by a commercial
lender. Loan proceeds may be used for working capital, machinery and equipment,
buildings and real estate, and certain types of debt refinancing. The primary
purpose is to create and maintain employment and improve the economic climate in
rural communities. This is achieved by expanding the lending capability of
private lenders in rural areas, helping them make and service quality loans that
provide lasting community benefits. This program represents a true
private-public partnership.
B&I loan guarantees can be extended to loans made by recognized commercial lenders or other authorized lenders in rural areas (this includes all areas other than cities or unincorporated areas or more than 50,000 people and their immediately adjacent urban or urbanizing areas). Generally, recognized lenders include Federal or State chartered banks, credit unions, insurance companies, savings and loan associations, Farm Credit Banks or other Farm Credit Systems institutions with direct lending authority, a mortgage company that is part of a bank holding company, and the National Rural Utilities Finance Corporation. Other loan sources include eligible Rural Utilities Service electric and telecommunications borrowers and other lenders approved by the RBS who have met the designated criteria.
Business and Industrial (B&I) Direct Loans
The Business & Industry (B&I) Direct Loan Program provides direct
loans to public entities and private parties who cannot obtain credit from other
sources. Loans to private parties can be made for improving, developing, or
financing business and industry, creating jobs, and improving the economic and
environmental climate in rural communities (including pollution abatement). This
type of assistance is available in rural areas (this includes all areas other
than cities or unincorporated areas of more than 50,000 people and their
immediately adjacent urban or urbanizing areas).
Rural Business Enterprise Grants
The Rural Business-Corporation Service (RBS) makes grants to finance and
facilitate development of small and emerging private business enterprises in
areas up to 50,000 in population with priority to applications for projects in
rural communities of 25,000 and smaller and economically distresses communities.
Non-federal leveraging of funds and job creation are also key in consideration
for this grant program. Eligibility is limited to public bodies, private
nonprofit corporations and tribal groups. Costs that may be paid from grant
funds include the acquisition and development of land, construction of
buildings, plants, equipment, access streets and roads, parking areas, utility
and service extensions, refinancing, fees and technical assistance. Grants may
also be used to establish a revolving loan fund.
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 Dakota Certified Development Corporation is an intermediary for the U.S.
Department of Agriculture's Rural Development Intermediary Relending Program
and also provided loan application assistance for participation in the U.S.
Small Business Administration's 7(a) Loan Guaranty Program. The purpose is to
finance business facilities and community development projects in rural areas.
Bank of North Dakota - North Dakota's Development Bank
Website: http://www.banknd.com
Phone: 1-800-472-2166 ext. 5671 or locally 701-328-5600
General Participation Loan Program
This program can be used for any type of business. Proceeds may be used for
working capital, equipment and real property.
BND: Beginning Entrepreneur Loan Guarantee
Any lending institution that is related or funded under the laws of North
Dakota or the United States is eligible. A North Dakota borrower resident,
who has graduated from high school or received a general equivalency certificate,
has had some training by education or experience in the type of revenue producing
enterprise, has a net worth of less than $100,000 excluding the value of
the equity of their principal residence, the value of their automobile and
personal belongings is required.
BND: Business Development Loan Program
This program is designed to assist new and existing businesses in obtaining
loans that would have a higher degree of risk than would normally be acceptable
to a lending institution. The proceeds of a loan shall be used to (1) Establish
or purchase new or existing business. (2) Finance the acquisition of real
property. (3) Remodel or expand an existing business. (4) Purchase or lease
equipment (5) Provide working capital. (6) Refinance an existing loan.
Security for the loan is evaluated on a loan-by-loan basis. Examples of
acceptable security are real estate, machinery, equipment, furniture, fixtures,
accounts receivable, inventory, leasehold improvements, and assignment of
leases, assignment of life insurance, and letters of credit or guarantees.
BND: PACE - Agriculture Partnership in Assisting Community Expansion
The PACE Fund is designed to provide low interest financing to on-farm
businesses. The program assists North Dakota communities in expanding their
economic base through new job creation. This program has two major elements: (1)
participation by BND with a local lender in a community based loan, and (2) the
participation by the PACE Fund with the local community in reducing the
borrower's overall interest rate. The borrower can be any person or entity whose
business is in manufacturing, processing, value-added processing, major
destination tourist attractions, and targeted service industries. Targeted
service industries are businesses involved in data processing, telemarketing,
telecommunications and major destination tourist attractions.
The proceeds of a loan may be used for the purchase of real property and equipment and certain working capital requirements. The program cannot be used to refinance any existing debt or for relocation within North Dakota.
BND: INVEST - Value-Added Agriculture Equity Loan
To be eligible under this program the borrower may own no more than 10% of
the project. Loan proceeds are for the purchase of shares in start up or
expansion of Ag processing plants intended to process North Dakota grown
products. Project ownership may be other than a cooperative business structure
if the intent of this loan program is met.
Additional BND Programs
STEP - Start-up Entrepreneurial Program
Borrowers for this program include all small businesses including home-based
businesses, retail, service and manufacturing. The program is designed to
work in conjunction with other state and federal small business loan programs,
such as the SBA LowDoc loan program. BND will participate with a lead lender
up to 60% of the total loan, or $60,000. All projects are required to have
a minimum of 15% equity in the business.
SBA Main Street Purchase Program
BND may purchase up to 100% of the guaranteed portion of an SBA Guaranteed
loan provided to any new or existing small business. Additional funds may
be obtained from any other funding sources and proceeds may be used for fixed
assets, working capital and start-up costs.
CO-OP Equity Loan Program
To be eligible under this program the borrower may own no more than 10% of
the project. Loan proceeds are for the purchase of shares in start-up or
the expansion of ag co-op processing plants intended to process North Dakota
grown products. It is desirable that the plant be located in North Dakota;
however, exceptions may be made based on the overall economic benefits of
the state. The loan Borrowers must be a North Dakota resident whose principal
occupation is farming or ranching.
U.S. Small Business Administration
North Dakota District Office - (701) 239-5131 Website: http://www.sba.gov
The SBA enables its lending partners to provide financing to small businesses when funding is otherwise unavailable on reasonable terms by guaranteeing major portions of loans made to small businesses.
The Agency does not currently have funding for direct loans nor does it provide grants or low interest rate loans for business start-up or expansion. The eligibility requirements and credit criteria of the program are very broad in order to accommodate a wide range of financing needs.
7(a) Loan Guaranty
Lenders, rather than SBA, approve and service the loans and request SBA
guaranties. The 7(a) Loan Guaranty Program is the SBA's primary loan program.
Loan proceeds may be used for business start-ups, expansion,
equipment purchases, working capital, inventory or real-estate acquisitions.
Check out their website for more information. Website Address:
http://www.sba.gov/financing
SBA Express
Makes it easier and faster for lenders to provide small business loans of
$150,000 or less. Allows lenders to use their own forms and processes to
approve loans guaranteed by the SBA. Provides a rapid response from SBA-within
36 hours of receiving the completed application. Lets lenders take advantage
of electronic loan processing and provide small revolving loans. Provides
minimal paperwork to SBA to obtain a 50 percent guaranty on the loan.
CAPLines
CAPLines is the umbrella program under which the SBA helps small businesses meet
their short-term and cyclical working capital needs. A CAPLines loan can be any
dollar amount (except for the Small Asset-Biased Line) Under this program loan,
proceeds generally will be advanced against a borrower's existing or anticipated inventory and/or
accounts receivable. The five lines available include: Seasonal Line, Contract
Line, Builders Line, Standard Asset-Based Line and Small-Asset Based Line.
PREQUALIFICATION Loan Program
This program enables the SBA to prequalify a loan that targets low income
borrowers, disabled business owners, new and emerging businesses, veterans,
exporters, rural and other special industries. SBA pre-qualifies the loan
guaranty before the business owner approaches a lender. Working through an
intermediary, a review is developed using key financial ratios, credit history,
business history and the proposed use of the proceeds. Small Business
Development Centers that serve as intermediaries do not charge a fee for loan
packaging. For-profit organizations will charge a fee.
NOTE: Documentation requirements may vary when planning your
material package to take to a lender. Contact your lender in advance for the
information you must supply.
Certified Development Company
(504) Loan Program
The 504 Certified Development Company (CDC) Program provides growing businesses
with long-tern, fixed rate financing for major fixed assets, such as land and
buildings to small businesses. A Certified Development Company is a nonprofit
corporation set up to contribute to the economic development of its community.
CDCs work with the SBA and private sector lenders to provide financing to small
businesses. There are about 270 CDCs nationwide. Each CDC covers a specific
geographic area.
Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped. The maximum SBA debenture is $1,000,000 for meeting the job creation criteria or a community development goal. Generally, a business must create or retain one job for every $35,000 provided by the SBA. The maximum SBA debenture is $1.3 million for meeting a public policy goal.
Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment.
Microloan Program
The Microloan Program provides very small loans to start-up, newly established,
or growing small business concerns. Under this program, SBA makes funds
available to nonprofit community based lenders (intermediaries), which in turn,
make loans to eligible borrowers in amounts up to a maximum of $35,000. The
average loan size is about $10,500.
Small Business Development Center
(SBDC)
(701) 777-3700 or toll free 1-800-445-7232 Website:
http://www.ndsdbc.org
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 www.ndsbdc.org 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.
SBDC OBJECTIVES Provide free, in-depth, quality assistance to small business in all areas that promote growth, expansion, innovation, increased productivity and management improvement. Link resources of federal, state, and local governments with those of colleges, universities, and the private sector to meet the needs of the small business community. Develop and expand the unique resources of the education system, the private sector, and state and local governments to provide services to the small business community not otherwise available. Advocate small business interests. Tailor services to meet the changing needs of the small business community. Increase non-federal financial support to enhance and expand program activities. Contribute to the economic growth of the communities served and create a broad-based delivery system. Any present or prospective small business owner is eligible for management and technical assistance at the SBDC at no charge. It is the philosophical approach of the SBDC to guide and train the client in the areas of assistance required, rather than doing the work for them. |
SBDC ADVANTAGES Individuality - SBDCs are tailored to focus on individual state, region, and community needs. SBDCs have developed a broad range of skills and specialized support services to provide solutions to highly specialized as well as basic small business management problems. Many SBDCs provide procurement and technical assistance to small businesses seeking private, state, and federal contracts. Coverage - SBDCs are designed to provide assistance to the entire small business community. Every effort is made to ensure that SBDC services are accessible to all small business clients. To accomplish this, SBDCs develop partnerships with other organizations throughout the state to facilitate assistance. Job Creation and Retention - SBDCs are involved in economic development activities and have developed working relationships with innovation and incubator facilities that play an important role in the creation of new businesses. SBDCs continually measure the employment effects of their services. Funding - Federal funding is matched dollar-for-dollar with a minimum of 50% provided by local or state entities. As an SBDC matures, state matching funds are a significant source for program growth. SBDCs leverage federal and state funds with the private sector contributions including donated time, equipment and actual dollars. Income generated through SBDC activities provides additional services. |
One Stop Capital Center
"Your Network to Financing Programs"
(701) 328-5850 / 1-800-544-4674 Website:
http://webhost.btigate.com/~onestop
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.
An important component of the One Stop Capital Center is the Business Information Center (BIC). The Business Information Center is a joint venture between the Bank of North Dakota, the Dakota Certification Development Corporation, the North Dakota Small Business Development Corporation, the North Dakota Small Business Development Center, The Service Corps of Retired Executives (SCORE), and the United States Small Business Administration. The Business Information Centers offer computer hardware, software, interactive videos, telecommunications, and a library of resource material designed to help start-up and expanding businesses. The Business Information Centers combines technology with on-site counseling and training programs. Counselors from the Service Corps of Retired Executives (SCORE) and the Small Business Development Center are available for free counseling on broad-based business issues.
The One Stop Capital Center is proud to work with other resource service
providers including:
USDA/Rural Development
Bank of North Dakota (BND)
US Small Business Administration (SBA)
Dakota Certified Development Corporation
North Dakota Economic Development & Finance (ED&F)
SCORE Service Corps of Retired Executives (701) 239-5687
SBDC - Small Business Development Centers - 1-800-445-7232
ND Department of Economic Development and Finance
Growing North Dakota - 701-328-5300- Web site Address: http://www.growingnd.com
Provider of high-quality products and services to assist companies with their relocation, start-up, retention and expansion needs, including research and intelligence, business development, workforce development, marketing, global development, education, policy development and financing.
North Dakota Development Fund
This fund provides financing for primary sector businesses to include value-added
agriculture, manufacturing, and exported services. The fund provides "gap"
financing not available from other, more conventional sources. Innovative
financing options are available to provide both long and short-term capital
to new, expanding or relocating businesses. Funds are available for debt
financing, equity investment or partnership. The Development Fund also
administers the Regional Rural Revolving Loan Fund, which provides funding for
projects located in rural areas. To access the Rural Revolving Loan Fund, the
primary-sector business must be located in a community of less than 8,000 in
population or be located more than five miles outside the city limits.
Agricultural Products Utilization Commission
(APUC)
1833 E Bismarck Expressway, Bismarck, ND 58504 phone: 701-328-5350
The North Dakota Agricultural Products Utilization Commission (APUC) will accept proposals for research and marketing grants under the program conditions and guidelines. The mission of APUC is to create new wealth and jobs through the development of new and expanded uses of North Dakota agricultural products.
APUC was created by the State Legislature to provide assistance to conducting research on the development of new and/or expanded uses for North Dakota agricultural products; by developing technical basis that create more efficient systems of processing marketing agricultural products and by-products and to promote efforts to increase productivity and also provide added value to agricultural products.
APUC grant information includes:
APUC Farm Diversification Grant, APUC International Market & Utilization Grant
APUC Marketing and Utilization Grant, UPAC Prototype Grant, and APUC Research
Grant, Contact APUC for more information on specific proposals.
Other Grant Information
The North Dakota Department of Commerce/Tourism Division have a matched grant program for the birds, or the birders. ND Tourism Department is offering the Matched Grant Program to individuals businesses and other organizations wanting to promote their tourism-related activities within North Dakota. Grant recipients will receive 25 percent of the grant money within 90 days their grant is approved. The remaining 75 percent will then be paid upon the completion of the grant program or their project.
North Dakota State University
NDSU Extension Service