Resources & Incentives

There are several agencies that work in partnership with the Tripp County Office of Development to help businesses succeed and grow. Interested in starting a new business? Check out these helpful links:
New Business Start-Up Packet
SD Small Business Development Center
Small Business Administration

Incentives

South Central Development Corporation (SCDC), the City of Winner and Tripp County are prepared to provide assistance with land acquisition, financial and tax incentives.

Affordable Land Development

Adjacent to SD Hwy 44 and just off US 18, our 120-acre SCDC Development Park lots are available in a variety of sizes. SCDC will assist with land acquisition if company chooses to purchase private land in Tripp County. Water and three phase power is available at the site and sanitary sewer hookups are nearby.

Property Tax Rebate Program

Tripp County offers a 5 Year Property Tax Abatement program for companies that choose to build new facilities.

• Year 1- 0% property tax, Year 2- 20%, Year 3- 40%, Year 4- 60%, Year 5- 80% of the normal rate.

Tripp County Revolving Loan Fund

Over $300,000 in Revolving Loan Funds are available at 3%.

REDI Fund

Purpose

The 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 matching funds 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;
• fees, services, and other costs associated with construction;
• 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;
• and 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.

SBA 504

Purpose
The SBA 504 loan program offers subordinated, fixed rate financing to healthy and expanding small businesses. Long-tem, fixed rate financing (10-20 years) and reasonable rates (near long-term U.S. Treasury bond rates), make the 504 Program an attractive and effective economic development financing tool.

Criteria
Type of Financing: The 504 Program is available for fixed asset purchases only: land, building, and equipment with an useful life of 10 years or more. No working capital, inventory, venture capital or refinancing are eligible.

SBA 504 financing is "permanent" take-out mortgage financing. Interim or construction financing must be utilized to complete the project.

Eligible Businesses: Eligible borrowers are user, for-profit businesses. Ineligible businesses include not-for-profit, passive investment and real estate companies, financial institutions, developer/landlord arrangement, ventures, private recreation facilities and unregulated media firms.

Size Requirements: The net worth of an eligible business may not exceed 7.5 million. Its net profit after taxes must not have exceeded an average of $2.5 million during the previous two years. Should a company fail to meet these standards, the company will still be considered a small business if it meets size requirements, based on the number of employees, which vary among the different industries depending on NAICS codes.

How the Program Works

Structure: Typically the 504 loan has a 50-40-10 structure where fifty percent (50%) of the project is financed by a regulated lender that receives a first mortgage position on all project collateral. Forty percent (40%) is provided by the South Dakota Development Corporation which sells debentures guaranteed by SBA and receives a subordinated collateral position. The remaining ten percent (10%) is provided by the borrower in a cash equity injection. This is the minimum equity contribution and depending on the project, and available personal resources, the SDDC may require a larger contribution. *Start-up businesses or single purpose facilities require an additional equity contribution of 5%. If the business meets both of these criteria a 20% equity contribution is required.

Regulated Lender: At least 50 percent of the project cost must be provided from "non-federal" sources, such as commercial banks, S & L's, saving banks, insurance companies and equity contributions. The lender will receive a first position on the assets acquired with the loan proceeds. The maturity of this loan must be at least 7 to 10 years, depending on the amortization of the SBA loan, and have an interest rate which is "legal and reasonable", fixed or variable and may be renegotiable. The renegotiation formula must be stated in advance.

South Dakota Development Corporation: Eligible businesses may borrow up to $1,500,000, ($2,000,000 in designated areas) with a minimum of a $50,000 loan being obtained through the SDDC. Loan amounts are available for small manufacturing is $4,000,000. The SDDC portion of the project may not exceed forty percent(40%) of the eligible project costs, nor can the SDDC portion exceed the first mortgage amount. The goal of the program is to create at least one job for each $50,000 of debenture or one job for each $100,000 for small manufacturing. Personal/corporate guarantees are required of all individuals or entities having 10 percent or more ownership in the business and may be required for managers who occupy key positions that are vital to repayment ability, regardless of their ownership percentages.

The SDDC sells debentures, guaranteed by SBA, with a 10 or 20 year maturity based upon the weighted average of the useful life of the assets purchased with the loan proceeds. The rate of interest is fixed for the term of the loan and determined at the time of sale of the debenture, which is based on the current average market yield.

There are various one-time fees associated with the 504 loans. The one-time processing fees total approximately 3.25% and are added to the loan amount. On-going servicing fees are added to the interest rate and include fees to the Central Servicing Agent, the SDDC and SBA. In addition, a 0.5% fee is payable by the first mortgage lender to the SBA.

Equity Injection: The borrower generally provides at least 10 percent of the project cost in the form of a cash equity injection.

APEX Fund

Purpose
The APEX (Agricultural Processing and Export) Loan Program is designed to assist companies in communities with a population of 25,000 or less, which add value to raw agricultural products through processing, or export a minimum of 75% of its product to entities outside the State of South Dakota or replace an import. The program is open to for-profit businesses and local economic development corporations.

How it Works
This program may provide up to 75 percent of the total project cost and requires the applicant to secure the other funds before applying for the APEX loan, including a 10 percent minimum equity contribution. The maximum loan amount available from the APEX program is $187,500.
Eligible project costs include the purchase of land and the associated site improvements, the purchase and installation of machinery and equipment, the construction, acquisition or renovation of a building, and fees, services and other costs associated with construction.

Terms

Interest rates are between five and seven percent, depending upon the risk of the project and the amount of participation by APEX. The interest rate will be determined at loan consideration and will be fixed for the life of the loan. The loans are amortized over the useful life of the assets being financed

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MicroLOAN

The MicroLOAN South Dakota Loan Program is a partnership with the Board of Economic Development, South Dakota Development Corporation, and Governor's Office of Economic Development. These loans are made available to small businesses within the borders of South Dakota and South Dakota residents, including main street and retail operations, for working capital, equipment, real estate or other fixed asset project costs.

Bond Financing

Purpose
Another financing option is the pooled loan program through South Dakota's Economic Development Finance Authority. This loan program, designed for more capital intensive projects, provides small businesses access to larger capital markets for tax-exempt or taxable bond issuances. The program can fund projects individually or pool them to help lower the cost of the bond issuance. One of the biggest advantages of this program is a long-term loan with a fixed interest rate.
A major benefit to borrowers is the South Dakota Economic Development Finance Authority's "A" rating by Standard and Poor's. By maintaining an "A" rating, the Authority is able to offer a lower interest rate to the applicant.

Stand Alone Issuance

Individuals may also apply for Stand-Alone Bond Issuances when there is a need for an authorized issuing agency. The application below needs to be completed for these requests as well.

Who's Eligible
All for profit businesses that are engaged in the operation of an industrial, processing or manufacturing business may apply for bond financing through the South Dakota Economic Development Finance Authority.

How it Works
The bonds can be either taxable or tax-exempt. To qualify for tax-exempt financing the borrower must be a manufacturer. Bond proceeds can be used to finance 80 percent of new construction or purchase of existing building, and 75 percent of new equipment costs, with no greater than 25 percent of the bond proceeds being used for ancillary activities such as office or inventory space.

Value-Added Agriculture Subfund

Purpose
In 1999, a $3 million fund was created specifically to assist in funding feasibility and marketing studies for prospective value-added ag business. This Subfund of the REDI Fund is just one step toward improving value-added ag in South Dakota.

By partnering with the Department of Agriculture, local communities, commodity organizations and others, the Governor's Office of Economic Development will work with you to take your project from conception to completion. Our goal is threefold:

• To find niche markets that will add value to South Dakota ag commodities
• To help fund marketing and feasibility studies, and
• To help assemble the right people, capital and labor to ensure a successful project.

How it Works

• Assemble background information on the proposed ag project and contact GOED.
• Complete the program application and submit it to GOED.
• GOED staff will review the application, determine eligibility and contact the applicant. Eligible applications will be presented to the SD Board of Economic Development for consideration.
• If approved, proceed with the feasibility or marketing study.

Who's Eligible & Terms

• Any for-profit business, nonprofit cooperative or group that forms an eligible legal entity may apply for a loan from the Subfund.
• Loans cannot exceed more than 45 percent of the total eligible project costs for marketing or feasibility study expenses.
• Applicant must provide equity contribution of at least 10 percent of the total project cost for marketing and/or feasibility study expenses.
• Applications can be submitted at any time.
• The staff of the GOED will screen all applications for completeness and eligibility requirements within 30 days of receiving it.
• Loan proceeds may be used for salaries, consultant contracts, supplies and necessary services for feasibility or marketing studies.
• The maturity of a VASF loan may not be more than five years with regular payments amortized over not more than 20 years.

Workforce Development Program

Through SD’s Workforce Development Program, companies have access to dollars to help train new AND existing employees. Think your business could benefit by upgrading your employee's skills? Click on the links below to find out more.

The Governor's Office of Economic Development will provide technical assistance to help develop the Workforce Development Program application. Technical assistance is provided to help identify approaches and ideas necessary to develop a successful project.

Tourism Enhancement Program

Tourism is vital to Tripp County’s economy. That's why helping tourism related businesses grow is a priority. 
The Tourism Enhancment Program is earmarked specifically for feasibility studies and marketing of value added tourism projects. This fund is another big step toward growing tourism in South Dakota.

The Tourism Enhancment Program can be used to attract more visitors to Tripp County from other states and countries; lengthen the stay of visitors to South Dakota; expand the visitor season to the shoulder seasons; create primary jobs in the visitor industry and expand upon the historical, cultural, scenic, wildlife and other resources in South Dakota.

STEP 1: Assemble preliminary information on project prior to contacting the Department of Tourism and State Development.

STEP 2: Submit a complete application. Include any additional documents necessary to explain your project.

STEP 3: Wait for approval. All complete applications will be presented to the Board of Economic Development at the nest special or regularly scheduled meeting.

How it Works

• Any for-profit business, nonprofit cooperative or group that forms an eligible legal entity may apply for a loan from the subfund.
• Loans cannot exceed 45 percent of the total project costs for marketing, feasibility study expenses or other project expenses.
• Applicant must provide equity contribution of at least 10 percent of the total project cost for marketing, feasibility study expenses or other project expenses as determined by the board.
• Applications can be submitted at any time. Reviews of applications are done as they arrive.
• The staff of the Department of Tourism and State Development will screen all applications for completeness and eligibility upon receipt.
• Loan proceeds may be used for necessary services for feasibility or marketing studies or other eligible project costs.
• The maturity of a loan may not be more than five years with payments amortized over not more than 20 years.
• The staff at the Department of Tourism and State Development will present the application to the Board of Economic Development within 30 days of receiving it.

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