Dakota CDC has established a partnership with Impact Foundation to offer an Intermediary Relending Program (IRP) to provide below market rate loans to businesses and nonprofits in rural North Dakota communities. Particular emphasis will be placed on offering these loans to health and safety related organizations servicing rural North Dakota. Dakota CDC administers and delivers the Impact IRP.
Impact IRP Eligibility
- Any private business, non-profit entity, political subdivision, public body, special purpose district or authority serving rural areas with populations below 25,000 is eligible for these IRP funds.
- Emphasis will be placed on loans to health and safety related organizations serving rural North Dakota.
- Business is unable to obtain the proposed loan elsewhere at a reasonable rate.
- 51% of the owners or members must be citizens of the U.S. or individuals admitted for residents.
Impact IRP Guidelines
- Require dual internal approval
- All principal’s credit scores must be greater than 650
- No exceptions or extension in excess of 6 months to the established loan terms
- Working capital: up to 36 months
- Equipment: up to 5 years
- Maximum: up to 15 years
- Minimum 10% equity injection
- Personal Guaranties required by all owners over 20% ownership
- Refinances are generally prohibited, unless good justification can be made as to why the refinance is necessary (i.e. to obtain first position on collateral)
- 1st lien or shared 1st lien position required on all collateral
The applicant is required to provide at least 10 percent equity in the project; the amount of security varies on a case-by-case basis. The owners must personally guaranty repayment of the loan.
When a bank participates with Dakota CDC in funding a project, the CDC generally shares the first position on collateral unless other security is provided.
Repayment terms are based on the use of the loan proceeds or the life of the assets being financed. Generally the term is 7 years or less.
Dakota CDC provides IRP loans at a fixed rate for the term of the loan. The rate will be set at the time the application is reviewed, depending on risk and length.
Financing Business Growth & Community Development
Dakota Certified Development Corporation has been authorized by the U. S. Department of Agriculture to offer direct loans to small businesses throughout North Dakota.
Funded under the federal Intermediary Relending Program, Dakota CDC offers these loans to finance business facilities and community development projects in rural areas — including cities with populations of up to 25,000.
The program’s goal is to provide financing for community development projects, establishment of new businesses, expansion of existing businesses, and creation of new jobs or retention of existing jobs.