- South Dakota/
- Capital: Pierre
- Population (2012 Est.): 833,354
- Largest Cities (2012): Sioux Falls, 159,908; Rapid City, 69,854; Aberdeen, 26,791; Brookings, 22,591; Watertown, 21,803
- Targeted Industries: Professional Business Services, Energy, Advanced Manufacturing, Bioscience, Financial Services, Shooting/Hunting/Outdoors
- GDP (All Industry 2012): $42.4 billion*
*Bureau of Economic Analysis, U.S. Department of Commerce
Ethanol Incentive Bill (SB196): Since it passed during the 2011 legislative session, the Bill already has made $6 million of new funding available for a Revolving Economic Development Initiative loan fund and $2.5 million for new ethanol infrastructure at retail fueling stations. Through a partnership with the ethanol industry, the legislature repurposed funding a total of $10 million to secure additional capital for the Revolving Economic Development Initiative (REDI) Fund. The REDI Fund is one of South Dakota’s primary economic development financing tools. In addition, through an incentive program created by SB196, $3.5 million in funding will be provided to encourage additional ethanol consumption and blender pump installation.
Agricultural Processing and Export (APEX): A loan program designed to assist companies in communities with a population of 25,000 or less, which add value to raw agricultural products through processing, or export a minimum of 75% of its product to entities outside the State of South Dakota or replace an import. It is open to for-profit businesses and local economic development corporations. This program may provide up to 75% of the total project cost and requires the applicant to secure the other funds before applying for the APEX loan, including a 10% minimum equity contribution. The maximum loan amount available from the APEX program is up to $250,000. Eligible project costs include the purchase of land and the associated site improvements, the purchase and installation of machinery and equipment, the construction, acquisition or renovation of a building, and fees, services and other costs associated with construction. In 2011, the reduced the interest rate on the APEX loan program to 3%.
Microloan SD: A partnership with the South Dakota Development Corporation and Governor’s Office of Economic Development (GOED). These loans are made available to small businesses within the borders of South Dakota and South Dakota residents, including main street and retail operations, for working capital, equipment, real estate or other fixed asset project costs.
Microloan Express Program: Introduced to streamline the MicroLOAN application and approval process. The MicroLOAN Express operates in the same fashion as the MicroLOAN, with the following exceptions: If an applicant qualifies under the policies and procedures of the MicroLOAN and they receive bank or credit union approval, approval under the MicroLOAN Express will be automatic as long as the MicroLOAN Express portion is in a pro-rata first collateral position with the bank or credit union. The bank or credit union must file all of the documents it requires of the applicant, as well as all internal documents relating to the loan with the Governor’s Office of Economic Development in order to receive the paperwork relating to the MicroLOAN Express loan. The MICROLOAN can also partner with other local revolving loan funds. The program guidelines are the same other than the requirement for the revolving loan fund to share the collateral in a first position with MicroLOAN.
Revolving Economic Development & Initiative (REDI) Fund: Provides permanent financing for land, building, machinery and equipment and associated installation costs. Designed to help promote job growth in South Dakota, this low-interest loan fund is available to start-up firms, businesses that are expanding or relocating and local economic development corporations. The REDI Fund provides up to 45% of a project’s total cost. Companies should secure interim (construction) financing, matching funds for permanent financing and be able to provide a 10% minimum equity contribution before applying to the Board of Economic Development for a REDI Fund loan. It offers fixed rate interest, which is currently 2%. Loans may be amortized up to 20 years on land and buildings and up to 10 years on equipment, with a balloon payment due after five years.
Small Business Administration (SBA) 504: Offers subordinated, long-term fixed rate financing (10-20 years) at reasonable rates (near long-term U.S. Treasury bond rates) to healthy and expanding small businesses. The 504 Program is available for fixed asset purchases only: land, building and equipment with a useful life of 10 years or more. Working capital, inventory and venture capital are NOT eligible. SBA 504 financing is “permanent” take-out” financing. Interim or construction financing must be utilized to complete the project.
Bond Financing: Provides small businesses with access to the public bond market.
Community Development Block Grant (CDBG): Provides matching grants to local governments, municipalities and counties. The program allows the state to fund a variety of different projects in small cities and rural areas. All projects must meet one of HUD’s national objectives, with the primary objective to benefit people of low-moderate income (LMI).
South Dakota WORKS: Business/commercial loans for businesses needing working capital. The term is one to five years and the loan amount is up to $1 million with a minimum amount of $20,000. Eligible borrowers include businesses seeking new financing and certified development financial institutions that meet US Treasury guideline. Borrowers can only have one WORKS loan program at a time for a company. Funds can be used for business purposes such as startup costs, working capital, payroll, inventory needs and new construction loans.
Workforce Development Training: Provides matching grants to assist companies with up to 50% of eligible training expenses.