REDI Fund Loans

Purpose
We give new meaning to the phrase "ready, willing and able." Our REDI (Revolving Economic Development and Initiative) Fund is designed to help promote job growth in South Dakota. This low-interest loan fund is available to start-up firms, businesses that are expanding or relocating and local economic development corporations.

How it Works
The REDI Fund provides up to 45 percent of a project's total cost. Companies should secure interim (construction) financing, matching funds for permanent financing and be able to provide a 10 percent minimum equity contribution before applying to the Board of Economic Development for a REDI Fund loan.

Costs eligible for participation may include:

• the purchase of land and the associated site improvements
• construction, acquisition or renovation of buildings
• the purchase and installation of machinery and equipment.

Costs that are NOT eligible include:

• refinancing of existing debt
• short-term, interim financing for the construction or acquisition phase of a project
• trade receivables
• inventory
• other working capital needs
• preliminary design stage costs which include, but are not limited to market research, written cost estimates, development of business plan
• preliminary product development costs

Terms
Interest rates have remained at 3 percent since the program's inception, and loans are amortized up to 20 years on land and buildings, and 10 years on equipment, with a balloon payment due after five years.