North Dakota is strategically positioned with financial investments to assist new and expanding businesses to enhance profitability. The state has specifically designed its business and investment programs to deliver quicker, quality service along with more capital during a company's start-up, expansion or relocation.
North Dakota provides a collaborative effort between federal, state and private sector resources. Through a coordinated plan, partnering entities deliver convenient access to numerous financial assistance programs.
The Bank of North Dakota (BND) is the only entity of its kind in the nation - a state-owned bank dedicated to promoting commerce, industry and agriculture. BND offers numerous low-interest loan programs in collaboration with a lead lender to meet the financing needs of most any new or expanding business.
Starting or expanding a business can be challenging in many areas such as location, workforce, equipment and financing. BND offers many financing services that can help those challenges become easier to handle.
Financing is the focus of the BND efforts to stimulate economic development in the state for both business and agricultural lending services. It offers a variety of programs in each area.
Business Financing Services
Beginning Entrepreneur Loan Guarantee Program
This program is designed to assist in business start-up financing by providing a financial institution with an 85% guaranty of a loan not to exceed $100,000.
Biofuels PACE
Biofuels PACE (Biofuels Partnership in Assisting Community Expansion) was established to buy down the interest rate on loans to biodiesel and ethanol production facilities, and livestock operations.
Business Development Loan Program
The Business Development Loan 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 total outstanding amount under this program by BND may not exceed $25 million.
Commercial Bank Participation Program
Commercial Bank Participation Program 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.
Flex 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.
Agricultural Financing Services
Agriculture Partnership in Assisting Community Expansion (Ag PACE)
This program has been established to buy down the interest rate on loans to farmers who are investing in other nontraditional agriculture activities to supplement farm income.
Beginning Farmer Farm Loans (Revolving Loan Fund)
The Beginning Farmer Loan Programs assist the farmer and rancher in the first time purchase of farm real estate and/or the purchase of equipment and livestock. Each qualified applicant is eligible for a $250,000 loan from the Real Estate Loan Program and $250,000 loan from the Chattel Loan Program.
Biofuels PACE
Biofuels PACE (Biofuels Partnership in Assisting Community Expansion) was established to buy down the interest rate on loans to biodiesel and ethanol production facilities, and livestock operations.
Established Farmer Real Estate Loan Program
The Established Farmer Real Estate Loan Program assists the farmer and rancher with agricultural real estate loans. The bank may make direct loans to farmers for agricultural purposes. The borrower must be a North Dakota resident.
Family Farm Loan Program
The North Dakota legislature has developed a program to help family farms. This program allows BND to participate in loans for qualified purposes up to 90% of the loan amount.
Farm and Ranch Participation Program
This program follows the principles of BND's participation loan program, that all loans should: 1) Serve the legitimate credit needs of the State; and 2) Be made on a sound and collectible basis. The total loans and extensions outstanding at any one time to a single borrower may not exceed 15% of BND's total capital. All loans are reviewed in accordance with BND's lending policies and sound banking practices including, but not limited to, the intended purpose of the loan, the ability to repay, the operation and its management and the feasibility of the project.
Farm Operating Loan Program
The North Dakota legislature has established a loan program to assist with farm operating loans. The bank may participate in farm operating loans with the minimum requirements for eligibility as a "farmer".
Farm Real Estate Loan Guarantee Program
This program is designed to assist farmers with the purchase or the restructuring of agricultural real estate loans by providing a financial institution with a 75% guarantee of total loans that do not exceed $400,000 to an individual borrower. The bank may guarantee loans for the purchase of agricultural real estate or the restructuring of agricultural real estate loans to North Dakota residents by banks, credit unions, lending associations that are part of the farm credit system, and savings and loan associations in the state of North Dakota.
First Time Farmer Finance Program
The North Dakota First Time Farmer Finance program (NDFTFFP) is a tax-exempt bond program designed to assist first-time farmers in the state to acquire agricultural property at lower interest rates. BND, acting as the Farm Finance Agency, determines the eligibility of the applicant and also approves and issues the bond. The bond will then be assigned to a Bond Purchaser which typically is a financial institution or contract holder. Since the interest received by the Bond Purchaser is exempt from state and federal tax, the interest rate to the first-time farmer is at a lower rate.
Flex 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.
Government Guaranteed Loan Purchase Program
The Government Guaranteed Loan Purchase Program (FSA or Rural Development) has been designed at BND to provide interest rate assistance to borrowers that are experiencing cash flow difficulties. The bank may purchase the guaranteed portion of a term loan guaranteed by the Farm Service Agency, Rural Development, or Small Business Administration.
Partnership in Assisting Community Expansion (PACE)
One of the most attractive programs is the Partnership in Assisting Community Expansion (PACE) fund, an interest buy down loan program that is available to primary sector business including manufacturing, data processing, communications, telecommunications and targeted service industries.
The PACE Fund is designed to assist North Dakota communities in expanding their economic base by providing for new job development. 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 overall interest rate.
Value-Added Agriculture Equity Loan Program (ENVEST)
The ENVEST Program provides a below market interest rate for North Dakota farmers and businessmen to purchase shares in start up or expanding agricultural processing facilities.
MATCH Program
The MATCH program is designed to encourage and attract financially strong companies, "A" rated or equivalent. Loan funds may be used to finance real estate, machinery and equipment, and for the purchase or lease of equipment. The program targets manufacturing, processing and value-added industries.