Economic Development
Loans for economic development projects are available through North Central Electric Cooperative and the United States Department of Agriculture (USDA). Qualifying projects could receive up to $450,000 in loan monies, at 0% interest. A third-party guarantee on the loan is required. This can be accomplished with a bank certificate of deposit, a bank loan guarantee, a bank line of credit or some other financial instrument.
Development loan fund started by co-op
North Central Electric Cooperative also has established a revolving loan fund to help economic development projects in the area. The loan fund was established through a rural development grant from the U.S. Department of Agriculture Rural Development in 1999.
The revolving loan fund is for primary sector business job creation or retention.
Eligible projects include retail business and community facilities as long as these types of projects demonstrate an impact on the local economy.
Other projects include industrial and commercial development, small business expansion or business incubators, community infrastructure and facilities, medical facilities, training and educational facilities and tourism projects. Production agriculture does not qualify, but value-added agricultural processing does.
Although the project does need to be located in or close to North Central Electric Co-operative's service area, the project does not have to be served by the cooperative.
The minimum loan from the revolving loan fund is $5,000. The maximum loan size is limited to funds available in the revolving loan fund at the time. Interest rates will be determined based on risk, liquidity of collateral and equity.
Adequate collateral is required to protect the interest of the revolving loan fund. The collateral must be of such a nature that repayment of a loan is reasonably assured.
A pre-application starts the process to determine if the project qualifies for revolving loan funds.
Based on this, a full application is needed for the cooperative to consider. A comprehensive business plan must be included.
For more information about North Central Electric Cooperative's revolving loan fund, call Cedric Jacobson, general manager of the cooperative, at (701) 228-2202 or (800) 247-1197.
