Revolving Loan Funds (RLF)

Revolving Loan Funds are not part of the SBA program but are also designed to fuel growth in South Dakota. The RLF provides flexible term financing options at affordable interest rates of 5-7%. This form of small business financing is also an attractive lending option for participant lenders as FDDC will share the credit risk.

Terms & Requirements

  • Eligible Uses – RLF financing can be used for fixed assets, equipment, inventory or working capital.
  • Eligible Businesses – any new or expanding for-profit or non-profit South Dakota business is eligible.
  • Maximum Amount – as much as 30-40% of a project can be financed, depending on the availability of funds, loan maximum of $250,000.
  • Economic Development Criteria – while there aren’t specific job position count requirements, the FDDC Board will evaluate projects based on the economic impact for South Dakota.
  • Terms – loans are available for 20 years or less with flexible amortization options. Interest rates are set by the FDDC Board and generally fall between 5-7%.
  • Loan Structure – 10% equity from borrower and the balance will be financing through FDDC and the participating lender.
  • Fees – there is a one time 1.5% loan origination fee.
  • Collateral – this varies on a case by case basis and FDDC generally shares the first position on collateral, unless other security is provided.
  • Service area – businesses must reside in the following South Dakota counties: Brookings, Clark, Codington, Deuel, Grant, Hamlin, Kingsbury, Lake, Miner, Moody, and Roberts.

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Application Process

  • Initial Interview – the approval process begins with a meeting between the borrower and/or lender as well as a FDDC representative to review the details of the project.
  • Application Submission – Based on the project parameters, FDDC will outline the required documentation and forms that need to be completed by the borrower.
  • FDDC Board Approval – once all application components are received, FDDC will perform a review and present the loan request to the FDDC Board of Directors for approval. Loan approval is typically received within 1-2 weeks of application.
  • Closing & Funding – a closing will be scheduled following the purchase of all assets or the completion of all project construction. Funding will take place on the closing date.

If you have questions about RLF options or would like to learn more about how FDDC can help you financing your upcoming project, please give us a call at 605-882-5115.