CREDIT OFFICER'S REPORT by Dick Werner

Larry Robinson, a Pierre man who had been an employee in the retail grocery business for 37 years, was able to experience his dream of business ownership in 2007. Robinson purchased Korner Grocery in Pierre through a cooperative team effort of BankWest (Deide Baldwin, Assistant Vice President/Commercial Loan Officer); Pierre Economic Development Corporation (Jim Protexter, Executive Director); Mid Dakota Economic Development Corporation (Andy McKay, President), and South Dakota Rural Enterprise through the South Dakota Community Capital Fund (SDCCF) program.Robinson expressed his appreciation to everyone for assisting him in making the purchase become a reality. Deide Baldwin was the lead lender and worked with Robinson to develop an affordable and feasible plan for him to acquire the business. The plan not only called for BankWest to assist in the purchase with a first lien position but also incorporated a long term fixed rate-junior lien financing option with the SDCCF program through a secondary market for commercial loans. The program was available for Robinson and BankWest because of a deposit that both the Pierre Economic Development Corporation and Mid Dakota Economic Development Corporation had made with South Dakota Rural Enterprise for the SDCCF program.

The SDCCF loan program leverages the local development corporation’s funds on deposit with SD Rural Enterprise to equal a 10 to 1 loan availability offering. For example: a minimum deposit of $25,000 would allow a long term fixed rate option on a junior security position of up to $250,000. A $100,000 deposit would allow up to a million dollars in a junior loan. SDCCF allows for a maximum loan to value or purchase price (whichever is less) up to 90%. SDCCF also allows for borrowers with experience in a like business or industry to purchase an existing business and also offers existing businesses the opportunity to expand. The 10% borrower injection can come in many forms of equity that the borrower is able and willing to offer. One added benefit of SDCCF loans is that they offer participating banks the option to choose what percentage they desire to lend on a first lien basis.

Larry Robinson plans to make Korner Grocery a family business and has brought his son Chad in to help run the company and be the next generation to carry on his goals. SD Rural Enterprise thanks all the parties involved in working with Larry for making his dream become a reality. For more information on the South Dakota Community Capital Fund Loan Program, please contact the South Dakota Rural Enterprise office or contact me directly at 605-350-1371.

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