Another financing option is the pooled loan program through South Dakota's Economic Development Finance Authority. This loan program, designed for more capital-intensive projects, provides small businesses access to larger capital markets for tax-exempt or taxable bond issuances. The program can fund projects individually or pool them to help lower the cost of the bond issuance. One of the biggest advantages of this program is a long-term loan with a fixed interest rate. A major benefit to borrowers is the South Dakota Economic Development Finance Authority's "A+" rating by Standard and Poor's. By maintaining an "A+" rating, the Authority is able to offer a lower interest rate to the applicant.
Individuals may also apply for Stand-Alone Bond Issuances when there is a need for an authorized issuing agency. The application below needs to be completed for these requests as well.
All for-profit businesses that are engaged in the operation of an industrial, ag processing or manufacturing business may apply for bond financing through the South Dakota Economic Development Finance Authority.
How it Works
The bonds can be either taxable or tax-exempt. To qualify for tax-exempt financing the borrower must be a manufacturer and total project costs must be less than $20,000,000. Bond proceeds can be used to finance 80 percent of new construction or purchase of existing building, and 75 percent of new equipment costs, with no greater than 25 percent of the bond proceeds being used for ancillary activities such as office or inventory space.