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North Dakota Incentives
Community Development Block Grant
Description:
The North Dakota Community Development Block Grant (CDBG) program provides financial assistance, in the form of matching grants, for community development activities. These funds are block granted to states from the Department of Housing and Urban Development (HUD), and in turn, the State has designated the eight Regional Councils to recommend projects for potential funding.
Eligibility:
Local units of government (i.e. incorporated cities and counties) are the only eligible applicants for CDBG funding.
How to Apply: Contact the Souris Basin Planning Council at 701-839-6641.
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Community Development Loan Fund
Description:
Provides low-interest financing for business start-ups and business expansions on a dollar for dollar matching basis.
Eligibility:
Primary Sector: Businesses which through the employment of knowledge and/or labor, add value to a product, process or exported service that results in the creation of new wealth (not including production agriculture). Maximum loan amount is $500,000.
Retail Sector: Businesses involved in the direct sale of commodities to the ultimate consumer within the local area or state as well as adult and child daycare. Maximum loan amount $150,000.
North Dakota cities and counties are the only eligible applicants for CDLF funds.
Interest rate and maturity of the CDLF investments are determined on a case by case basis.
How to Apply: Contact the Souris Basin Planning Council at 701-839-6641.
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Venture Capital
North Dakota Small Business Investment Corporation (NDSBIC). NDSBIC is a venture capital limited partnership formed as a small business investment company in May 1995. The Fund will use the majority of its capital to make equity investments in North Dakota and U.S. based growth and later stage manufacturing, service and retail businesses which have the potential for substantial growth and long-term equity appreciation. In addition, NDSBIC may invest a portion of its capital in early stage ventures.
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Bank of North Dakota
The Bank of North Dakota (BND) is the only state owned and operated bank in the nation. It offers economic and industrial development financing instruments that are not found elsewhere. Although the bank does not make direct loans to businesses, the loan programs can be accessed through participation with a lead financial institution.
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PACE (Parnership in Assisting Community Expansion)
Available for businesses involved in:
- Manufacturing
- Processing
- Value-added processing
- Targeted service industries (i.e. telecommunications, data processing)
Combines the resources of the local community and the PACE Fund in buying down the loan's interest rate.
- Community match varies (15% to 35%)
- Maximum PACE Fund participation is $250,000
- Interest rate reduction is limited to the lower of 5% below the yield rate (Bank's rate) or 3% below the national prime rate (as published in the Wall Street Journal), but not less than 5% below the national prime rate or a minimum of 1%
- One job must be created for every $75,000 of loan proceeds
- Business must be located in North Dakota.
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AG PACE
This program was established to provied low interest financing to on-farm businesses.
- Program funds are used to buydown the interest rate on loans, which have been approved by a local lender and the BND.
- Available to any business, except traditional production agriculture, which is integrated into a farm operation.
- Funds may be used to purchase equipment, real estate improvements, equity shares for value added projects.
- Proceeds must be for the purchase of irrigation equipment.
- Proceeds for the purchase of equity shares must be issued by a new or expanding value added ag processing facility.
- Interest rate, after buy down, will be 5% below the national prime lending rate.
- Total buy down amount may not exceed $20,000.
- BND is required to take at least 50% but not more than 80% of the loan.
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BIODIESEL PACE
- Biodiesel production facilities located in North Dakota involved in production of diesel fuel containing at least five percent biodiesel meeting the specifications adopted by the American Society for Testing and Materials
- Blending facilities will not qualify
- Eligible uses of Biodiesel PACE loan proceeds are for the purchase of real property and equipment, expansion of facilities, working capital, and inventory.
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Business Development Loans
Program is designed to assist new and existing businesses that have a higher degree of risk than is normally acceptable to lending institutions.
Lead lender(s) participation cannot be less than 30% of the total loan amount
- BND's maximum loan participation is $500,000
- Interest rate on the BND's participation percentage will be equal to the BND's base rate
- BND' s interest rate will float
- Interest rate charged by the lead lender may not exceed 3% above BND's base rate
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MATCH
Program was established to attract financially strong companies ("A" or better rating) to North Dakota
- Targeted to manufacturing, processing and value-added industries
- Loan funds may be used to finance real estate, machinery and equipment, or the leasing of equipment
- Interest rate charged approximately equal to an U.S. Treasury Note rate plus .25% to .50%
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Department of Commerce - Economic Development & Finance Division
The Department of Commerce provides additional assistance through a number of programs.
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North Dakota Development Fund (NDDF)
NDDF is a non-profit development corporation with the purpose of providing flexible "gap financing" for start-up, second-and-third-stage growth companies.
- Borrower must be a North Dakota primary sector business.
- Investments include equity positions, loans, real estate, partnerships and other innovative financing mechanisms
- Businesses may receive up to $300,000, but not more than half of the project' s total capitalization needs.
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Regional Rural Development Revolving Loan Fund
The Rural Fund is a pool of funds available for rural areas of North Dakota. Dollars are allocated equally among the eight economic planning regions.
- Projects must be located more than five (5) miles outside the city limits of any North Dakota city with a population of 8,000 or more
- Investments include equity position, loans, real estate, partnerships and other innovative financing mechanisms
- Businesses may receive up to $300,000, but not more than half of the project' s total capitalization needs.
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Agricultural Products Utilization Commission (APUC)
APUC provides funding for the research, development, and marketing of value-added agricultural products. Eligible projects/studies include:
- Development and marketing of new and/or expanded uses or technologies for processing North Dakota agricultural products.
- Industrial and other non-food products and processes utilizing agricultural output.
- Food, feed, and fiber products and uses, which are innovative and add to the value of agricultural products.
Mini grants up to $5,000 are available for on-farm, value-added enterprises.
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New Action Grants
- Monies up to $1,000 awarded to new and/or small businesses that have limited research and development funds available to them
- Intended to encourage the use of outside expertise to improve a business and can be used to gain knowledge, study ideas or concepts, or acquire patent protection
- Promote entrepreneurship and help primary sector businesses grow.
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