Is Dakota CDC a ND non-profit or a government entity? Also, what is your source of funding?

• Dakota CDC is a private, not-for-profit 501 c(3) organization created 30 years ago. Since we are a private not-for-profit we invest our profits in other business development and economic development efforts across the state and region we serve. For example, we have supported the North Dakota Small Business Development Centers, the Impact Foundation Procurement Center and others. While we do not receive any direct government support we do have some loans that we use for relending to small business from both the US Small Business Administration and the USDA. We operated much like any small business and our revenue is generated from the processing and servicing fees from the small business loans we make.

What is one of the major risks Dakota CDC has when booking a 504 loan?

• The major risk is that the loan is not repaid and we ultimately see a loss. By having a guarantee by SBA, Dakota CDC does not see a direct loss, but it does affect the program and subsidy fee on a national basis. On our own loan programs, SBA and USDA IRP, the major risk of any loan is entirely absorbed by our own loan loss reserve.

Would any of your programs work on the purchase of farm real estate? Will SBA Guarantee loans to farmers? Is the legal lending limit of a Bank a reason for qualifying for a SBA Guarantee loan?

• There are situations where the SBA 504 loan program can be used to purchase farm real estate, usually in conjunction with some other small business purpose. For example, a farmer may want to put up a small hog operation so he or she purchases 40 acres, builds a building and acquires some equipment. This purchase of the 40 acres could be included in with the total project as long as it was in keeping with the small business operations. SBA does guarantee loans to farmers and it really is a case-by-case basis. A lender can access up to 40 percent of a project under the 504 loan program up to $5 million and this does help with the legal lending limit of the bank. The SBA 504 portion does not count toward your legal lending limit.

What are the advantages of using Dakota CDC over other CDC’s in the region?

• While the 504 loan program is pretty standard anywhere in the county, each individual CDC is different. Dakota CDC is the only independent, private not-for-profit CDC in North Dakota. All of our competitors are affiliated with a government or quasi-government organization. Dakota CDC receives no government support and is only successful if the small businesses we assist are also successful. Other important advantages of using Dakota CDC are as follows:
  • Oldest CDC in the state – we have been a certified CDC since 1982, providing SBA loans for over 29 years
  • The largest CDC in the state – we have financed over nine hundred 504 loans for $260 million
  • 96 percent of all 504’s done in ND are done through Dakota CDC
  • 83 percent of all lenders accessing the SBA 504 loan program use Dakota CDC
  • The most experienced CDC in the state with a staff that is dedicated solely to the 504 loan program. We invest, on an annual basis, training and education dollars to keep our staff up to date and knowledgeable about the program and any changes
  • Completed an extensive four day review by the office of credit risk of SBA and had a clean review
  • Through financial investments we have supported several thousands of dollars in other statewide economic development efforts
  • We are the only CDC in North Dakota that has SBA accredited status and ASM status for expedited processing
  • We provide other small business lending alternatives, like the USDA IRP and the SBA micro-loan program

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