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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.
Qualifying Requirements
Borrower - The required location of the business is North Dakota. Businesses which are eligible for this program because financial conditions or the nature of the industry reflect a higher degree of credit risk than would normally be acceptable to a lending institution.
BND's participation percentage is negotiated on a loan by loan basis. In no case will the local lender's portion be less than 10% of the total loan amount.
Loan Limit - BND's maximum loan participation amount is $500,000.
Use of Proceeds - The proceeds of a loan shall be used to:
- Establish or purchase new or existing business.
- Finance the acquisition of real property.
- Remodel or expand an existing business.
- Purchase or lease equipment.
- Provide working capital.
- Refinance an existing loan.
Equity - There is no minimum equity requirement. All applications are evaluated on a loan by loan basis.
Collateral - Adequate collateral is required. This collateral must be of such a nature that repayment of the loan can be reasonably expected.
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, assignment of leases, assignment of life insurance, letters of credit or guarantees.
Application Process
Application by a lead lender is required for BND's participation. See application
for additional documentation required when submitting a request to BND.
Lead lender is responsible for servicing the loan.
Interest Rate
The interest rate charged at the time of funding by the lead lender may
not exceed 3% above BND's Base Rate.
Variable Rate Option: .50% below Prime adjusted monthly or quarterly.
Fixed Rate Option: 2.25% over the Federal Home Loan Bank of Des Moines Advance Rate with a rate lock not to exceed 5 years.
Repayment Terms
The repayment terms will vary depending upon the use of the proceeds. As a general guideline, the following maturities apply to this program:
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| Real Estate |
12 to 15 years |
| Equipment |
5 to 7 years |
| Working Capital |
3 to 5 years |
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FEES
An origination fee of up to 1% of the total loan may be charged and is shared with BND.
For more information about this program or other Bank of North Dakota programs,
contact:
Bank of North Dakota
700 East Main Ave
PO Box 5509
Bismarck ND 58502-5509
(701) 328-5671
1-800-472-2166 ext. 5671
TDD (Telephone Device for the Deaf) 1-800-643-3916
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