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Farm and Ranch Participation Program
BND's participation loan program is founded on the principles that all loans
should:
- Serve the legitimate credit needs of the State.
- 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.
Qualifying Requirements Use of Proceeds - BND will consider a
broad range of loan applications. Desirable loans include, but are not limited
to, the following:
- Construction, conversion, expansion, repair and modernization of farm improvements.
- Purchase of land, livestock, machinery and equipment and the repair and modernization of the machinery and equipment.
- Operating needs.
- Refinancing an existing loan.
- For any other reasonable agricultural purpose.
Equity - Specific equity requirements have not been established. Each loan is
reviewed on its own merits. The amount of equity required is evaluated
along with all other elements of the operation.
Collateral - Adequate collateral will generally be required to protect the
interest of BND. The collateral must be of such a nature that repayment of a
loan is reasonably assured. Examples of acceptable collateral may include:
- Accounts receivable and inventory for short-term loans.
- Machinery and equipment which have an established market.
- A first mortgage on farm real estate.
- Livestock and crops.
In addition, personal guarantees are required from the principals with respect
to corporate and partnership borrowings.
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 on BND's participation percentage is set in accordance with
either the loan policies for the program or the current market rate for similar
loans. Such factors as risk, liquidity of collateral, equity position, repayment
and the term of the loan will all be taken into consideration.
Repayment Terms
BND will place primary emphasis upon a borrower's ability to repay a loan
rather than upon the collateral pledged as security. BND will participate in a
loan only when a specific source of repayment can be identified and agreed
upon by all parties. Such a source must reasonably assure repayment. The
repayment terms assigned to these loans will vary depending upon the use of
the proceeds as well as the overall nature of the business. The following
maturities can be used as a general guideline for the term of loans.
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| Real Estate |
15 to 25 years |
| Equipment and Livestock |
5 to 7 years |
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Fees
Commitment fees, origination fees and service fees may be charged. These
fees will depend upon the loan request and be reviewed on an individual basis.
For more information on this program or other Bank of North Dakota programs,
contact:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5672
1-800-472-2166 ext. 5672
TDD (Telephone Device for the Deaf) 1-800-643-3916
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