Bank of North Dakota

The Bank of North Dakota serves as the only state owned bank in the nation. The Bank offers innovative capital financing programs which generate new wealth and new jobs for North Dakota.

The Bank of North Dakota offers several business start-up programs. Such loans are:

Business Development Loan Program

Beginning Entrepreneur Loan Guarantee Program

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Bank of North Dakota

www.banknd.com

Beginning Entrepreneur Loan Program

This program assists in business start-up financing by providing a financial institution with an 85% guaranty of a loan not to exceed $100,000.

A North Dakota resident, who has graduated from high school or received a general equivalency certificate, and has had some training by education or experience in that type of revenue producing enterprise. The applicant(s) must have a net worth of less than $200,000.

Bank of North Dakota may guaranty up to 85% of the amount of principal due the lender. The maximum loan may not exceed $100,000. The Bank may approve a guarantee on a loan up to $5,000 to a beginning entrepreneur for business start-up 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.

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For more information:

www.banknd.com/ls

Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5777
1-800-472-2166 ext. 5777
TDD (Telephone Device for the Deaf) 1-800-643-3916

North Dakota Development Fund

North Dakotans have an interest in financially supporting business as it provides jobs, broadens our tax base and enhances our quality of life. The North Dakota Development Fund coordinates efforts between all the sources of financing, the business and the community. Any project considered for this financing must be feasible and have a reasonable chance of succeeding.

The fund provides "gap financing" through loans and equity investments not available from most conventional lenders and is available to any primary-sector business with the exception of production agriculture. The Development Fund also administers the Regional Rural Revolving Loan Fund, which provides funding for primary-sector projects located in a community of less than 8,000 in population or located more than five miles outside the city limits.

The fund is a secondary source of financing, subordinate to private sources. If a business can't handle added debt, the Development Fund can take an equity financing position.

Search a listing of projects that have received loans through the North Dakota Development Fund.

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For more information:

www.business.nd.gov

North Dakota Development Fund
1833 East Bismarck Expressway
Bismarck, ND 58504
Phone: 701-328-5310
Fax: 701-328-5395

U.S. Small Business Administration (SBA) Business Loan Program

The Small Business Administration (SBA) is the primary advocate of small business within the federal government. SBA is known for its small business loan guarantees. Through its loan guarantee programs, the SBA provides access to financing for small businesses that cannot obtain financing on reasonable terms through normal lending channels. SBA can guarantee up to 80 percent of the loan amount for the qualifying businesses.

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For more information:

www.sba.gov/nd

US Small Business Administration
P.O. Box 3086
Federal Building, Room 219
657 Second Ave North
Fargo, ND 58108-3086
Phone: 701-239-5131
Fax: 701-239-5645

MicroLoan Program

The Small Business Administration first awarded funds to LARDC in 1993 to establish the Microloan Program. The purpose of the fund is to assist start-up, newly established, and all other small businesses obtain short-term, fixed rate financing. Eligible small businesses located throughout North Dakota may apply for a Microloan.

Loan proceeds may be used for working capital, inventory, and equipment needs with a maximum loan amount of $35,000.

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For more information:

www.lakeagassiz.com

Lake Agassiz Regional Development Corporation
417 Main Ave.
Fargo, ND 58103
Phone: 701-235-1197
Fax: 701-235-6706
Email: info@lakagassiz.com

The North Dakota Securities Department

The North Dakota Securities Department regulates the offer and sale of securities and franchises in the State of North Dakota, and protects the investing public by enforcing compliance with our state's laws.

The North Dakota Securities Department supports the capital formation process and provides mechanisms for North Dakota companies to access capital from the investing public. In the biennium that began July 1, 2001, Securities has provided capital formation support and assistance to 163 North Dakota companies working to raise $164,533,000 in capital from investors.

See the Department’s guide to raising capital by visiting the web site.

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For more information:

www.ndsecurities.com

North Dakota Securities Commissioner
State Capitol, 5th Floor
600 East Boulevard Avenue
Bismarck ND 58505
Phone: 1-701-328-2910
1-800-297-5124
Fax: 1-701-328-2946

Email: ndsecurities@state.nd.us

Seed Capital Tax Credit

An individual, estate, trust, partnership, corporation, or limited liability company is allowed an income tax credit for investing in a business certified by the Department of Commerce Division of Economic Development and Finance.

An investment may consist of a direct cash payment, or a direct transfer of cash from a retirement plan for which the investor controls where the plan’s assets are invested. The credit is equal to 45% of the investment. No more than $112,500 of the credit may be used in any year. An unused credit may be carried forward up to four tax years. In the case of a passthrough entity, such as a partnership or S corporation, or in the case of an angel fund, the credit is passed through to the entity’s owners, or the fund’s investors, in proportion to their respective interests.

Only the first $500,000 of eligible investments in the business are eligible for the tax credit. The total amount of tax credits allowed for investments made in all certified businesses in any calendar year is limited to $3.5 million.

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For more information:

ND Seed Capital Tax Credit

www.nd.gov/tax

Office of State Tax Commissioner
State Capitol, 600 E Boulevard Ave.
Bismarck ND 58505-0599
Phone: 701-328-2770
or
1-800-638-2901

Dakota Certified Development Corportation

The Dakota Certified Development Corporation has been working with the Small Business Administration’s 504 Loan program since 1983. In 1996 the program began a new chapter. Incorporated as a separate organization, the Dakota CDC, a non-profit 501(c)(3) emerged as an organization with its own name, its own identity and an agenda that requires a statewide presence.

The mission of the Dakota CDC is to bring a variety of finance tools to North Dakota businesses, working in conjunction with financial institutions and economic development organizations in communities across the state.

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For more information:

www.dakotacdc.com

Dakota CDC
Fargo, ND 58102
Phone: 701-293-8892
Fax: 701-293-7819
Email: info@dakotacdc.com

Center of North America Capital – CONAC FUND

The Center of North America Capital Fund is a community development venture capital fund that provides early stage and expansion stage equity investment to promising businesses located throughout North Dakota.

The CONAC Fund is a for-profit fund that is owned by its investors including individual accredited investors,banks,cooperative and
investor-owned utilities and other institutional, government or corporate investors. The focus of the Fund is on companies with exciting ideas and high potential.

The mission of the Fund is twofold:

• to retain investable capital in the region and
• to benefit the communities of the region by providing the seed capital necessary to assist businesses in growing and creating new jobs.

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For more information:

www.ndalliancelink.com/Investment

Center of North America Capital Fund, LLC
Delore Zimmerman or Douglas McDonald
CEO Praxis, Inc.
The Dacotah Building
100 North 3rd Street
Grand Forks, ND 58203
Phone: 701-775-3354
e-mail: delore@ceopraxis.com
doug@ceopraxis.com

Convexity LLC

Convexity LLC seeks out the most sound, innovative and promising web-based business plans and helps the entrepreneurs develop those ideas and bring them to market. In addition to seed capital, convexity LLC provides these e-entrepreneurs with world class technical, creative and business guidance, laying the groundwork for rapid growth and success.

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For more information:

www.convexityllc.com
convexity@convexityllc.com

Agricultural Products Utilization Commission (APUC)

The mission of the Agricultural Products Utilization Commission (APUC) is to create wealth and jobs through the development of new and expanded uses of North Dakota's agricultural products through a grant program.

A maximum of 15 qualifying applicants present funding proposals on a quarterly basis:

• basic and applied research grants
• marketing and utilization grants
• farm diversification grants
• agricultural prototype development grant program

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For more information:

www.business.nd.gov

John F. Schneider
701-328-5350
jfschnei@state.nd.us

or

Inez Ryberg
701-328-5318
iryberg@state.nd.us

Rain Source Capital
RAIN Source Capital is a multi-state network of RAIN® funds that works with angel investors who are interested in supporting growing companies. RAIN Source® helps bring together like-minded angel investors to form individual RAIN funds ~ and then provides these funds with a process for due diligence, legal templates, management support, access to deal flow and other resources.

RAIN funds share expertise, deals and experience between and among RAIN Source Capital’s multi-state network to support growing companies throughout the area.

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For more information:

www.rainsourcecapital.com

Rain Source Capital
1600 University Avenue West,
Suite 401
St. Paul, MN 55104
Phone: 651-632-2140
Fax: 651-632-2145

For more information:

www.dakotaventuregroup.com

Dakota Venture Group
Center for Innovation
4200 James Ray Drive
Grand Forks, ND 58203
Phone: 701-777-3132
Fax: 701-777-2339

Funding the Innovation Process

See article by Bruce Gjovig, Entrepreneur Coach – Funding the Innovation Process

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