Industrial Commission Authorizes Bank of North Dakota Programs to Assist Businesses in Pandemic Recovery Efforts
Bismarck- The North Dakota Industrial Commission today authorized the Bank of North Dakota (BND) to provide two financing programs to assist North Dakota businesses in obtaining long-term, low-interest loans to assist in the state’s economic recovery from the COVID-19 pandemic. The loan programs will help both small and large businesses to secure working capital and replenish inventory. The programs will be effective Wednesday, April 29, 2020.
“We understand and empathize with the challenging situation facing our business community. The Bank of North Dakota makes our state uniquely positioned to provide much-needed assistance as federal programs are exhausted,” said the Industrial Commission, which consists of Gov. Doug Burgum as chairman, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring, in a joint statement. “Long-term financing at low interest rates will help stabilize the economy, provide working capital to main street businesses and ensure our state emerges successfully from this unprecedented crisis.”
The Small Employer Loan Fund (SELF) will provide a loan of up to $50,000 to small businesses with a full-time employee equivalent (FTE) of 10 employees or less. These loans may be used for working capital, recurring expenses and replenishing inventory. Business owners will work with their local lender to access the program. The loan has a maximum term of 10 years and a fixed interest rate of 1%, with deferral of loan payments for up to six months.
The COVID-19 PACE Recovery Program (CPRP) will provide a loan of up to $5 million for businesses of less than 500 employees and a loan of up to $10 million for businesses with more than 500 employees. Loan payments may be deferred for up to six months, at which time the loan will term out with up to a 10-year amortization. The interest rate on the loan will be bought down by BND to 1% for a period of time, with a maximum buydown of $500,000. Business owners will access the program through their local lender. Unlike other PACE program offerings from BND, there is no community match required.
To qualify, North Dakota businesses must have been established before Feb.15, 2020 and loan applications must be received before Nov. 30, 2020.
BND staff assessed the federal program options and visited with stakeholders as it developed the program parameters.
“The financial institutions in North Dakota deserve the appreciation of our state’s residents. They have gone above and beyond to assist their communities during this time,” BND President Eric Hardmeyer said. “Because of their partnership, we are able to provide these loans in a timely manner so businesses can be open as soon as it is considered safe.”
Through a combination of the Coronavirus Relief Fund and the Bank of North Dakota’s accumulated and undivided profits, the Industrial Commission will make $200 million available for interest buydown and $50 million for low-interest loans. The buydown will be leveraged to provide up to $2 billion in low interest loans.
The Bank’s mission “to support agriculture, commerce and industry” has not changed since its earliest days in 1919. The only state-owned bank in the nation, the Bank of North Dakota is overseen by the Industrial Commission.
To learn more about loan program specifics, visit bnd.nd.gov.