We're here for South Dakota

Business dreams come in every size. Apply for a SBA 504 Loan or MicroLOAN and make your goals a reality. Let’s grow your business together.

South Dakota Development Corporation

Our Story

The South Dakota Development Corporation was created for you and South Dakota. Bill Janklow, former governor, saw enormous potential for both small businesses and primary lenders in South Dakota through the Small Business Administration 504 program. He worked with the private sector to help form SDDC—recognizing the federal program was underused.

The SDDC took it from there and was certified under the Small Business Administration as a Certified Development Company in 1983. If eligible, your new or existing business may borrow anywhere from $50,000 to $5 million through the SDDC. With low interest, fixed-rate loans, the SBA 504 program can help you reach your business goals.

In 1998, the MicroLOAN was added to the mix of lending capabilities. This program provides loans up to $100,000 for fixed asset financing or working capital needs. SDDC is here for you!

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SDDC 504 Loan Basics

Apply for low interest, fixed-rate small business loans for 10 or 20 year terms. And make yourself appealing to other lenders with less risk and lower loan amounts. Learn about SBA 504 loans and MicroLOANs with SDDC.

SBA 504

About SBA 504

SBA 504 Loan Quick Facts

  • Provides permanent fixed-rate financing for fixed assets
  • Available to for-profit businesses, including retail operations
  • As a Certified Development Corporation (CDC), the South Dakota Development Corporation offers 504 loans statewide
  • Loan amounts: maximum of $5 million; may increase to $5.5 million if project meets national objectives
  • Subordinate lien position to bank
  • Up to 20 year term, fully amortized
  • Takeout financing

Current SBA Real 504 Rates

10 Year 20 Year
November 2017 November 2017
4.470% 4.510%

How the SBA 504 Loan Structure Works

Typically the SBA 504 loan has a 50-40-10 structure.

  • 50 percent is financed by a regulated lender that receives a first mortgage position on all project collateral.
  • 40 percent is provided by the South Dakota Development Corporation, which sells debentures guaranteed by SBA and receives a subordinated collateral position.
  • 10 percent 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 percent. If the business meets both of these criteria, a 20 percent equity contribution is required.

SBA 504 Loan Structure Example:
Conventional loan; first mortgage $325,000 (50%)
SBA 504 Loan 20 year term, fixed rate $260,000 (40%)
Small Business concern, down payment $65,000 (10%)
Total Project Cost $650,000 (100%)
MicroLOAN

About MicroLOAN Program

MicroLOAN Quick Facts

  • Offers access to working capital for small enterprises; may also be used for fixed assets
  • 3% fixed-rate interest
  • 50% of total financing must be provided by a bank, credit union, or regional or local revolving loan fund
  • Loan amounts: from $1,000 to $100,000; project size may not exceed $500,000
  • May take a second collateral position behind a bank or credit union; takes a shared first collateral position if the lead lender is a regional or local revolving loan fund
  • Up to a 10 year term, depending on loan size
  • Takeout financing

How the MicroLOAN Structure Works

Typically, the MicroLOAN has up to a 50-50 structure.

  • The MicroLOAN can participate up to 50% of the total project costs and the primary bank or credit union may not fund less than 50% of the total project costs.
  • Total MicroLOAN proceeds outstanding at any one time, to a single borrower, may not exceed $100,000. Total project costs may not exceed $500,000.
  • The equity injection requirement may be determined by the primary bank or credit union. The loan committee may require and equity injection when the MicroLOAN portion of a project exceeds $20,000.

An administrative fee will be assessed in the amount of $50.00 or one and one half percent of the loan amount, whichever is greater. This fee will be paid by the applicant. The applicant will also pay for any filing fees for security instruments, title insurance, appraisals, and surveys required. The applicant will also pay any other costs associated with closing of the loan.

What South Dakota Business Owners Have to Say:

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Start Your Loan Application

Choose a small business lending partner who’s here for you. Our loan application process is convenient and straightforward—with requirements outlined for you. Begin making your business goals a reality. Apply for an SBA 504 loan or a MicroLOAN today!

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Contact Us or Send Your Loan Application

Have questions or comments? Ready to send your application? Contact South Dakota Development Corporation by submitting the form or directly contacting us at 605-773-8373 today.

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