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The North Dakota Development Fund Inc. (NDDF) provides “flexible gap financing” through loans and equity investments not available from most conventional lenders for the purpose of economic development. Funds are available to new and expanding North Dakota primary sector businesses.
The NDDF 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 NDDF makes investments of up to $3,000,000 through innovative financing mechanisms including direct loans, participation loans, and subordinated debt and equity investments. Any request of $150,000 or more must be reviewed and approved by the NDDF Board of Directors.
The NDDF also administers the Regional Rural Revolving Loan Fund, Rural Growth Incentive Programs, and Child Care Loan Program.
NDDF Mission Statement:
Provide flexible gap financing through loans and equity investments to spur the development and expansion of primary sector and main street businesses in the state of North Dakota.
North Dakota Development Fund Inc. Programs
The NDDF provides flexible gap financing to new or expanding primary sector businesses in North Dakota. Funds are available through direct loans, participation loans, subordinated debt and equity investments.
Use of funds: The NDDF funds may be used to provide working capital or to finance the purchase of fixed assets, but not to refinance existing debt. Funds may be used to purchase real property and equipment, expand existing facilities, provide working capital, and purchase inventory.
| Debt: | Equity: | |||
| BORROWER | Any primary sector business | BORROWER | Any primary sector business | |
| FUNDING LIMIT | Up to $3,000,000 Average Loan: $300,000 |
FUNDING LIMIT | Up to $3,000,000 Average convertible note: $250,000 |
|
| INTEREST RATE | Subject to risk of project | RATE OF RETURN |
In cases of a preferred security or convertible note: Interest/Dividend Rate: Subject to risk of project |
|
| TERM | 1-10 years, dependent upon project | TERM | 1-10 years, dependent upon project | |
| MINIMUM EQUITY REQUIREMENT |
15% | MINIMUM EQUITY REQUIREMENT | 15% | |
| PERSONAL/CORPORATE GUARANTEES |
Yes | PERSONAL/CORPORATE GUARANTEES | No | |
| COST AND FEES |
1% of capital deployed plus any legal fees incurred by NDDF. |
COST AND FEES | 1% of original loan or equity balance plus any legal fees incurred by NDDF. | |
Applications are reviewed on a first come, first-serve basis. Applications and supporting information should be submitted via email to hlange@nd.gov.
For question regarding the NDDF, please contact Hannah Lange, 701-328-7254.
The NDDF administers the Regional Rural Development Revolving Loan Fund, which provides flexible gap financing to primary sector businesses located in a community of less than 8,000 in population or located more than five miles outside of city limits. Funds are available through direct loans, participation loans, subordinated debt and equity investments.
Use of funds: The Regional Rural Development Revolving Loan Fund funds may be used to provide working capital or to finance the purchase of fixed assets, but not to refinance existing debt. Funds may be used to purchase real property and equipment, expand existing facilities, provide working capital, and purchase inventory.
| Debt: | Equity: | |||
| BORROWER | Any primary sector business | BORROWER | Any primary sector business | |
| FUNDING LIMIT | Up to $3,000,000 Average Award: $300,000 |
FUNDING LIMIT | Up to $3,000,000 Average Award: $250,000 |
|
| INTEREST RATE | Subject to risk of project | RATE OF RETURN |
In cases of a preferred security or convertible note: |
|
| TERM | 1-10 years, dependent upon project | TERM | 1-10 years, dependent upon project | |
| MINIMUM EQUITY REQUIREMENT |
15% | MINIMUM EQUITY REQUIREMENT | 15% | |
| PERSONAL/CORPORATE GUARANTEES |
Yes | PERSONAL/CORPORATE GUARANTEES | No | |
| COST AND FEES | 1% of capital deployed plus any legal fees incurred by NDDF. | COST AND FEES | 1% of original loan or equity balance plus any legal fees incurred by NDDF. | |
| MISCELLANEOUS | For business located in cities with a population of less than 8,000 or more than 5 miles outside city limits |
MISCELLANEOUS | For business located in cities with a population of less than 8,000 or more than 5 miles outside city limits |
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Applications are reviewed on a first come, first-serve basis. Applications and supporting information should be submitted via email to hlange@nd.gov.
For question regarding the Regional Rural Development Revolving Loan Fund, please contact Hannah Lange, 701-328-7254.
The NDDF manages the Rural Growth Incentive Program which provides loans to Rural Growth Incentive cities for a qualifying business. Rural Growth Incentive cities must have a population less than 2,500 and be certified as a Rural Growth Incentive city by the ND Department of Commerce. The city must raise dollar-for-dollar matching funds. A qualifying business must provide an essential service to the city which is determined by the city’s governing body and the ND Department of Commerce.
Grant dollars of up to $10,000 are available to Rural Growth Incentive cities for a feasibility study related to an essential business.
| Rural Incentive Growth Program | |
| BORROWER | Cities with population of less than 2,500 |
| FUNDING LIMIT | $25,000 - $75,000 |
| INTEREST RATE | Lower than market rate - subject to risk of project |
| TERM | Working capital 1-3 years, Equipment 3-5 years, Real estate 7-10 years |
| MINIMUM EQUITY REQUIREMENT |
N/A |
| PERSONAL/CORPORATE GUARANTEES |
Yes |
| QUALIFICATIONS | A North Dakota business that provides a community an essential service with ND Department of Commerce Commissioner approval |
| COST AND FEES | 1% of original loan amount |
| MISCELLANEOUS | The loan is made to the city which in turn loans to the business Awards must have a 1:1 match |
The North Dakota Development Fund Inc. (NDDF) must receive a letter from the community requesting funding which contains the information and documentation outlined below:
- Request for designation as a Rural Growth Incentive City
- Requirement: Population of less than 2,500
- Request for loan and/or grant dollars
- Up to $10,000 grant to defray costs of a feasibility study
- $25,000 - $75,000 for a loan
- Documentation verifying the community’s dollar-for-dollar match (any source of public/private funds)
- Shall include a copy of the check, financial statement or receipt, as well as proof the funds were deposited into a designated account
- Statement from the community that the business qualifies for funding as an Essential Service Company.
- I.e., a company that provides an essential service(s) to the community
- Does not include Public Utility
- The governing body of the city determines whether a business qualifies for funding
- Additionally, the Commissioner of the Department of Commerce determines whether a business that provides an essential service qualifies for funding
- Complete North Dakota Development Fund Inc. loan application including a business plan with financial information and sources and uses of the requested funds on behalf of the essential service company.
- The community shall also provide financial information to the NDDF.
Commerce is committed to providing the rural growth incentive city with training to assist in expanding businesses, locating new businesses, and working with state economic development programs. To that end, Commerce will designate an economic developer to work with the business upon request.
Please reach out to Samantha Mattson, 701-328-7252, with any questions relating to the community's application for funding.
The North Dakota Development Fund Inc. is authorized to provide financial assistance to new and expanding child care providers through the Child Care Loan Program.
Eligible Organizations: Licensed profit, nonprofit and public child care facilities. Faith-based organizations are eligible but must follow all appropriate federal guidelines if receiving federal subsidies.
Eligible Uses: The Child Care Loan Program funds may be used for the acquiring, leasing, or remodeling of real estate facilities, purchasing equipment or working capital.
| Childcare Loan Program | |
| BORROWER | Any licensed child care provider |
| FUNDING LIMIT | Maximum of $100,000 per location or based on availability of funds |
| INTEREST RATE | 2.5% - Fixed |
| TERM | 1-10 years, dependent upon project |
| MINIMUM EQUITY REQUIREMENT |
N/A |
| PERSONAL/CORPORATE GUARANTEES |
Yes |
| QUALIFICATIONS | A licensed North Dakota child care provider |
| COST AND FEES | $250 |
Applications are reviewed on a first come, first-serve basis. Applications and supporting information should be submitted via email to smattson@nd.gov.
For question regarding the Child Care Loan Program, please contact Samantha Mattson, 701-328-7252.
North Dakota Child Care Loan Program Application
Additional Resources:
Accountability Information Release
On March 11, 2021, President Biden signed The American Rescue Plan Act, which reauthorized and funded the State Small Business Credit Initiative (SSBCI). The new version of the SSBCI program provides a combined $10 billion to states, the District of Columbia, territories, and Tribal governments to empower small businesses to access capital needed to invest in job-creating opportunities as the country emerges from the pandemic. The funds will also support recipient jurisdictions in promoting American entrepreneurship and democratizing access to startup capital across the country, including in underserved communities. North Dakota’s total allocation amount is $58,641,843.
Through this program, the NDDF launched the North Dakota Angel Match Program (AMP) to support early-stage primary sector North Dakota businesses by matching investor commitments up to $250,000 per business.
Forms and Resources:
The AMP application and certifications are available as fillable PDF's and can be completed using the button/links below. Do not print and fill out these forms.
Important: These forms MUST be downloaded to function properly (contains automatic calculations, drop-downs, tab order). Using the pdf viewer within the browser disables this functionality.
Browser instructions for downloading can be found here.
Once you have filled out your form, save to your computer and email to: Shayden Akason - sakason@nd.gov
Angel Match Program Application
Principal Certification - SFN62276
SEDI Owned Bus Certification - SFN62258
SSBCI Form for Demographics - SFN62259
Investee Use of Proceeds and Conflict of Interest Certification - SFN62260
Sex Offender Investee Certification - SFN62261
Addendum to Investment Agreement
If you have any questions related to the forms, please contact Shayden Akason.
Applicant: Business
Amount: Maximum 1:1 match to private investment of $250,000 per business, minimum match amount of $10,000
Type: Convertible security or direct equity investment
Terms: AMP must receive the same terms as a matched investment. The Addendum to Investment Agreement must also be included and referenced in the investment agreement.
Closing Date: Matched investments must close on the same date as the AMP investment
Fee: $200/hour for legal fees incurred by the North Dakota Development Fund
Other: Businesses may only apply for the match once per financing round and receive no more than three separate investments from the AMP
Process:
- Business raises funds via an eligible investment vehicle and receives soft commitments from investors.
- Business submits the application, and supporting documentation to NDDF (see application for list of required documents).
- The NDDF reviews for SSBCI compliance and program alignment and sends to legal for review.
- The NDDF issues commitment or denial letter and sets a closing date.
- The NDDF and matched investors will sign investment agreement on the same date.
- Funds are advanced to company.
- The NDDF communicates with the business for reporting requirements going forward.
Eligible Businesses:
- Business must be registered with the ND Secretary of State.
- Must be certified as a primary sector business through the ND Department of Commerce.
- Must be headquartered in North Dakota and remain headquartered in North Dakota for as long as SSBCI capital is at risk.
- Must be in, and remain in, compliance with state and federal securities laws.
- Business must have fewer than 250 employees at the time of investment.
- No principal of the business has been convicted of a sex offense against a minor (as such terms are defined in section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. § 16911)).
Eligible Investors:
- May be individuals, LLCs, a business, a trust, or an investment fund. An investment from a principal is not an eligible matching investment.
- Investment funds must be in, and remain in, compliance with state and federal securities laws.
Eligible Investments:
- Total funding round amount, including the AMP funds, shall not exceed $2,000,000.
- Eligible Investment Vehicles: convertible notes, SAFE, direct equity investment.
- Matched investments must close on the same date as the AMP investment. The AMP cannot match any retroactive investments.
- The AMP may only match private investments. Dollars invested that originated from a public entity (i.e.: ND Department of Commerce, county funds, city funds, federal funds, etc) are not eligible for the match.
- For each investment resulting from this program, the investee must provide assurance that the investment proceeds will not be used for an impermissible purpose under the SSBCI program as set forth in the SSBCI Treasury Guidelines.
The NDDF has full discretion to deny matching an investment regardless of whether it meets the established criteria.
Business must submit annual reporting metrics.
Applications and related materials should be submitted via email to Shayden Akason. Applications are reviewed on a first-come, first-serve basis.
For questions regarding the NDDF, please contact Hannah Lange, 701-328-7254.
Frequently Asked Questions
Q: Can the match be done over multiple rounds?
A: Yes, businesses may apply for funding over multiple qualifying rounds.
Q: How long will it take to review my application?
A: Review of applications will take between 2 – 4 weeks.
Q: Is the NDDF doing their own diligence on a deal or is the money unlocked solely based on commitments from investors?
A: Business must show they have a reasonable chance of succeeding. The NDDF will ensure the business and investment structure aligns with the intent of the program.
Q: How does the NDDF define a business headquarters?
A: Headquarters: The place where a business's executive management and key managerial and support staff are located. A corporate headquarters is considered a business's most important location and may also lend prestige to its host city and help attract other businesses to the area.
Q: Who is considered a "principal" of my business?
A: “Principal” is defined as if a sole proprietorship, the proprietor; if a partnership, each managing partner and each partner who is a natural person and holds 50 percent or more ownership interest of any class of the partnership interests; if a corporation, limited liability business, association, development business, or other entity, each of the five most highly compensated executives or officers of the entity, and each natural person who is a direct or indirect holder of 50 percent or more of any class of equity interest in the entity; and if a partnership where the managing partner is a corporation, limited liability business, association, development business, or other entity, and each of the five most highly compensated executives or officers of the entity.
Q: How long will the program remain open?
A: The program has a revolving structure. Any returns from investments will be reinvested into the program for as long as the program exists.
Q: If I have private commitments for $2M, can I still apply for the AMP if it brings my total funds raised in the financing round to higher than $2M?
A: No. The total funds raised in the round cannot exceed $2M.
The NDDF selected the nationally acclaimed generalist venture capital investment platform, O’Leary Ventures (OLV) as a partner to manage a $45 million direct investment program aimed at bolstering economic growth throughout the state. The program coined as Wonder Fund North Dakota will position the state as a powerhouse for small businesses by providing early-stage investment opportunities for financial and operational growth through the expertise and management at OLV. Funds from the program will be used by OLV to invest in early-stage businesses headquartered in North Dakota with less than 500 employees. Wonder Fund North Dakota will consider companies based outside the state if their product and service have a material impact on North Dakota.
OLV was selected to manage the direct investment program through a competitive request for proposal process in 2022. Funds for Wonder Fund North Dakota were provided through the U.S. Department of Treasury State Small Business Credit Initiative (SSBCI). An approximate total of $58.6 million of SSBCI funds were allocated to the State of North Dakota for two equity and venture programs, the Angel Match Program and Wonder Fund North Dakota. Both programs are direct investment programs that will provide equity support directly to small businesses and startups by co-investing alongside private investors.
NDDF Staff
Shayden Akason
701-328-4563
Deputy Director/Head of Investment and Innovation
Jessica Tooke
NDDF CEO
Hannah Lange
NDDF Venture Financing Manager
Samantha Mattson
NDDF Venture and Credit Analyst
NDDF Board of Directors
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Erik Barner - Fargo Vice President Finance Sector Broadwater Capital |
Robert Lindberg - Bismarck Secretary/Treasurer Industrial Technology and Research Sector Laventure |
Nathan Davis - Belcourt Native American Representative Sector North Dakota Indian Affairs |
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Lindsay Ulrickson - Minot Finance Sector Bush Foundation |
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Jeff Thomas - Fargo |