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Additional Loan Program Resources

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.

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).

Women's Prequalification Loan Program -
http://www.sba.gov  -  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.

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 grant and farm diversification grants and 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. 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. And, 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.  

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: farm or ranch tours; hands-on chores; self- harvesting of produce; hunting operations; fishing operations (located on applicants land); bird watching; trail rides and corn mazes.

Examples of Non-Eligible Projects: - Non-eligible projects under the Nature Based Agri-Tourism grant include but are not limited to the following:  overnight stays in a bed and breakfast; visiting city, state, or national parks; community festivals and non-profit organizations i.e. 4-H clubs, Chamber of Commerce's, etc...   

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.

Bank of North Dakota - North Dakota's Development Bank  --http://www.banknd.nd.gov
(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. Programs available through the Bank of North Dakota:

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.  

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 $100,000.

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.

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.

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. Bank 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.

Additional program resource links:
USDA/Rural Development  http://www.rurdev.usda.gov
Bank of North Dakota (BND) http://www.banknd.nd.gov
US Small Business Administration (SBA) www.sba.gov/
Dakota Certified Development Corporation (DCDC) 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 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 is 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 on Financing and Technical Assistance.             
Small Business Development Center (SBDC) - Website: http://www.ndsbdc.org/about
(701) 777-3700 or toll free 1-800-445-7232 

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, and 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.

Objectives: (1. Provide free, in-depth, quality assistance to small business in all areas that promote growth, expansion, innovation, increased productivity and management improvement. (2. 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. (3. 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. (4. Advocate small business interests.  (5. Tailor services to meet the changing needs of the small business community. (6. Increase non-federal financial support to enhance and expand program activities. (7.Contribute to the economic growth of the communities served and creates a broad-based delivery system.     

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