An official website of the State of North Dakota
The Beginning Entrepreneur Loan Guarantee Program assists with business startup financing by providing financial institutions with guarantee of a loan not to exceed $500,000.
How to apply
BND offers this loan by partnering with local lenders. To apply, contact your lender.
If you have any questions, contact us or call (701) 328-5795.
Forms
Bank Participation Loan Application (PDF)
Loan Renewal Application for Existing Participations (PDF)
Loan Guarantee Lender Payment History (PDF)
To ensure proper functionality, BND forms MUST be downloaded and then opened with your system’s PDF application. Click here for download instructions.
If you are not able to access a PDF, please contact us for assistance.
Eligibility
Lead lender: The lead lender is responsible for submitting the Loan Guarantee Lender Payment History Form to BND.
Borrower: A North Dakota resident who graduated from high school or received a general equivalency certificate, has some training by education or experience in the type of revenue producing enterprise for which they are seeking a loan. Borrower’s net worth must be less than $500,000.
Use of proceeds
Proceeds may be used to finance:
- Purchase or improvements of real property, equipment or personal property,
- Working capital needs
- Child care home, group or center licensed by the Department of Human Services.
- Business startup expenses including accounting, legal and business planning
- Refinance or consolidate debt provided the amount of the refinance or consolidation does not exceed 20% of the total loan to be guaranteed
- BND may approve a guarantee on a loan up to $5,000 to a beginning entrepreneur for business startup expenses including accounting, legal and business planning. The Bank may approve a guarantee on a loan up to $25,000 without requiring collateral for the loan.
Loan amount/limit
The loan guaranty is based on this schedule:
| Loan amount | Maximum guarantee percentage |
|---|---|
| Up to $150,000 | 85% |
| $150,001 – $300,000 | 75% |
| $300,001 – $500,000 | 50% |
Interest rate and fees
Interest: The originating lender must charge an interest rate acceptable to BND. At the discretion of the lead bank with BND consent, a beginning entrepreneur may receive a one-year period of interest only payments at the beginning term of the loan.
Fees: Guarantee fee 0.50% per year or a one-time fee of 2.00% of the guaranteed portion.
Lending criteria
This program can be used in conjunction with other BND loan programs.
Collateral
Negotiable
Additional requirements
The lead lender establishes credit criteria.
Loan terms
The term of the BND guarantee may not exceed five years. The term of the loan period is at the lead bank’s discretion.