The backbone of South Dakota's economy is the success of small businesses in communities of every size throughout the state. Those small businesses, employing five people or less, represent the entrepreneurial spirit that has created towns and cities and transformed "mom and pop" enterprises into international companies.

To encourage those small businesses, South Dakota Rural Enterprise has announced a new financial product made possible through a program-related investment by the Northwest Area Foundation. SD Rural Enterprise has $500,000 available to purchase participation in loans made to low-income borrowers across the state of South Dakota.

These loans will be made only to borrowers of participants in SD Rural Enterprise's financial programs, typically Revolving Loan Funds or Community Development Financial Institutions. SD Rural Enterprise will purchase up to 50% of a qualifying loan from the participating organization.

The SD Rural Enterprise micro-enterprise loan amounts will range from a minimum of $5,000 to a maximum of $25,000, with a term of not more than seven years, although the loan may be amortized for a longer period during those seven years if the collateral warrants an extension. The interest rate will be fixed at a rate matching that of the originator, with a minimum of 4%. Borrowers must document that they are at or below 200% of the federal poverty guidelines at the time the loan was originated. For example, a family unit of four must show an annual income at or below $42,400 to qualify for the micro-enterprise loan program.

Collateral is not required for loan eligibility, and any collateral position will be shared with the participating development organization and other participants. SD Rural Enterprise will take a subordinate position to private institutions.

For more information, or to obtain application materials, contact SD Rural Enterprise Credit Officer Dick Werner at 605-350-1371 or e-mail dick@sdrei.org to learn more about the program and to discuss possible transactions.

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	Micro-Enterprise Program to Benefit Small Business Statewide