Grand Forks JDA Approves Changes to Startup Loan Program, Provides Loans to Two New Businesses
After a brief discussion that praised the program, the JDA, at its meeting on Tuesday, September 8, made the Grand Forks seed loan program a permanent part of its toolkit to provide seed funding. to “businesses. The JDA has also approved a number of changes to the loan program that expand its uses and make it available throughout the county.
“The headline here is that there is no flaw in this program which accepts a bit more risk than is traditionally offered,” said Brandon Baumbach, director of business development for Grand Forks Region Economic Development. Corporation.
Among the companies that received startup loans on Tuesday is Tacho Man LLC, a mobile catering service named after its flagship product Tachos, a combination of tacos and nachos. The company received a loan of just over $ 8,600, which it will use to secure another loan of $ 4,300 from the North Dakota Development Fund, to equip a van and trailer to be able to operate throughout. the year. Owner Amaziah Adams was required to take a stake equal to that of NDDF’s contribution.
Thunder Ray’s Auto Repair is another company that has received funding from the Start Up program and is the first company to use JDA’s changes to this program. The company received more than $ 15,500 in funding to locate on North Washington Street. These funds will be used to bridge the gap between the total cost of the project, approximately $ 60,000, and what the company’s credit union was willing to lend. So-called “gap funding” was not previously part of the Start-Up program. Like Tacho Man, Thunder Ray’s will also receive funding for half of the JDA loan amount, in the form of another NDDF loan. Thunder Ray ownership is also necessary to provide an equal stake in the business.
The JDA, in addition to making the Start-Up program permanent and available throughout the county, now requires start-ups to produce a denial letter from a bank, to prove that it is unable to access traditional financing. The JDA also set a “soft cap” for the amount that could be loaned. Under the previous loan program conditions, only $ 100,000 could be loaned in any given year. This amount can now be extended if the JDA receives requests for more than what has been set aside. The Growth Fund Committee will recommend approval or denial of applications above the $ 100,000 threshold, and will decide whether or not to stop accepting applications within one year.
City Council Chairman Dana Sande said he liked the idea of the squeeze cap and added that the city shouldn’t be afraid of people looking to relocate to Grand Forks.
“I would say we should always be open to people who come in and want to bring new businesses and new opportunities to our community,” Sande said.
Since its inception in 2017 under former Mayor Mike Brown, 10 businesses have been created under the Start-Up Loan program. Of these, one company has repaid its loan, four are up to date with their payments and the others are still in the deferral period. The loan has a term of five years at 5%, with interest and payments deferred for one year. The program provides loans of up to $ 20,000 to a business.
