Rural Economic Development Loan & Grant Program in South Dakota

PROGRAM STATUS:

Open

What does this program do?
The Rural Economic Development Loan and Grant program provides funding for rural projects through local utility organizations. USDA provides zero-interest loans to local utilities which they, in turn, pass through to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas. The ultimate recipients repay the lending utility directly. The utility then is responsible for repayment to USDA.
 
USDA provides grants to local utility organizations which use the funding to establish Revolving Loan Funds (RLF). Loans are made from the revolving loan funds to projects that will create or retain rural jobs. When the revolving loan fund is terminated, the grant is repaid to USDA.
 
Who may apply to this program?
To receive funding (which will be forwarded to selected eligible projects), an entity must be:
  • A former Rural Utilities Service borrower who borrowed, repaid or pre-paid an insured, direct or guaranteed loan.
  • Nonprofit utilities that are eligible to receive assistance from the Rural Development Electric or Telecommunication Programs.
  • Current Rural Development Electric or Telecommunication Programs borrowers.
What is an eligible area?
Intermediaries may use funds to lend for projects in rural areas or towns with a population of fewer than 50,000 residents. 
How much funding is available to local utilities?
  • Up to $300,000 in grants may be requested to establish the Revolving Loan Funds.
  • Up to 10 percent of grant funds may be applied toward operating expenses over the life of the Revolving Loan Fund.
  • Up to $1 million in loans may be requested.
 
The local utility applies to USDA for funding support on behalf of specified local projects. Projects may begin after an application is submitted, but there is no guarantee of approval. USDA funds are issued to the local utility at project completion.
 
What are the terms for the local utility?
  • 10 years at 0 percent interest.
  • Grants require a 20 percent match from the local utility.
  • Grants must be repaid to USDA upon termination of the Revolving Loan Fund.
How may funds be used?
The local utility passes the funding to ultimate recipients for such eligible projects as:
  • Business incubators.
  • Community development assistance to nonprofits and public bodies (particularly for job creation or enhancement).
  • Facilities and equipment to educate and train rural residents to facilitate economic development.
  • Facilities and equipment for medical care for rural residents.
  • Start-up venture costs, including, but not limited to, financing fixed assets such as real estate, buildings, equipment or working capital.
  • Business expansion.
  • Technical assistance.
 
NOTE: 7 CFR, Part 4280.27 and 7 CFR, Part 4280.30 list ineligible uses.
 
How much funding is available to business and community borrowers (the ultimate recipients) through the Revolving Loan Fund?
An ultimate recipient may request up to 80 percent of project costs using these funds, with the remainder provided by the ultimate recipient or the local utility.
 
What are the terms on the loan to the ultimate recipient?
  • The interest rate is 0 percent.
  • Up to 80 percent of project costs; 20 percent must be provided by the ultimate recipient or the local utility.
  • The local utility may incorporate interest rates or administrative loan fees after the funds have been loaned out and revolved once. First-time loans are at 0 percent interest.
  • Repayment may be deferred up to two years for projects including a start-up venture or Community Facilities project.
How do we get started?
Applications for this program are accepted through your local office year-round. You should work with your local office to acquire the documents needed to submit an application.
 
Who can answer questions?
Contact your local office.
 
What law governs this program?
  • Basic Program – Code of Federal Regulations, 7 CFR, Part 4280.
  • Loan/Grant Servicing – Code of Federal Regulations, 7 CFR, Part 4280 and 2 CFR Part 200.
  • This program is authorized by the Rural Electrification Act of 1936.
Why does USDA Rural Development do this?
Rural Development undertakes this program in order to promote rural economic development and job creation projects.
 
NOTE: Because citations and other information may be subject to change, please always consult the program instructions listed in the section above titled “What law governs this program?” You may also contact your local office for assistance.
 
 

 

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NOTE: If state specific forms are not shown above, please ensure that your state is selected in the dropdown menu above to find the State Office contact information and speak to a Business Programs Specialist before attempting to fill out any forms or applications. This will save you valuable time in your application.

You may also access the Code of Federal Regulations, 7 CFR, Part 4280.

There are no other additional requirements at the national level. If there are additional state-specific requirements they will be listed above.

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South Dakota Rural Business-Cooperative Programs Contact Map

RBS Map

Grant Konechne, Rural Business and Cooperative Programs Director
200 4th Street SW, Federal Bldg. Rm. 210
Huron, SD  57350
Phone: (605) 352-1108
Fax: (855) 262-1940

Clark Guthmiller, Specialist
1717 N. Lincoln Avenue, Suite 102
Pierre, SD  57501
Serves Campbell, Corson, Dewey,
Haakon, Hughes, Jones, Mellette, Potter,
Stanley, Sully, Todd, Walworth, and
Ziebach
Phone: (605) 301-3409
Fax: (855) 262-1942

Gary Wedel, Specialist
1820 North Kimball, Suite C
Mitchell, SD  57301
Serves Aurora, Brule, Buffalo, Charles
Mix, Davison, Douglas, Faulk, Gregory,
Hand, Hanson, Hyde, Jerauld, Lake,
Lyman, McCook, Miner, Sanborn, Spink,
and Tripp
Phone: (605) 299-3339
Fax: (855) 262-1941

Lance Lockwood (605) 858-6681, Specialist
414 East Stumer Road, Suite 200
Rapid City, SD  57701
Serves Bennett, Butte, Custer, Fall River,
Harding, Jackson, Lawrence, Meade,
Oglala Lakota, Perkins, and Pennington
Phone: (605) 858-6683
Fax: (855) 262-1943

Cayla Holleman, Specialist
1820 North Kimball, Suite C
Mitchell, SD  57301
Serves Bon Homme, Clay, Hutchinson,
Lincoln, Minnehaha, Moody, Turner, Union,
and Yankton
Phone: (605) 299-3357
Fax: (855) 262-1938

Cayla Holleman, Specialist
1820 North Kimball, Suite C
Mitchell, SD  57301
Serves Beadle, Brookings, Clark, Deuel, and Kingsbury
Phone: (605) 299-3357
Fax: (855) 262-1941

Clark Guthmiller (605) 301-3409 or Roxanne Woodring (605) 824-3623, Specialist
524 Enterprise Street South, Suite 100
Aberdeen, SD  57401
Serves Brown, Codington, Day, Edmunds,
Grant, Hamlin, Marshall, McPherson, and
Roberts
Phone: (605) 824-3627
Fax: (855) 262-1939

Carolyn Bloodgood, Technician
200 4th Street SW, Federal Bldg. Rm. 210
Huron, SD  57350
Phone: (605) 352-1144
Fax: (855) 262-1940

Teresa Urban, Loan Technician
200 4th Street SW, Federal Bldg. Rm. 210
Huron, SD  57350
Phone: (605) 352-1141
Fax: (855) 262-1940