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ENVEST - (Value-Added Agriculture Equity Loan Program)
Lead Lender - The lead lender may be a bank, bank holding company, state or federally charted lending agency or institution, or any other financial institution.
Borrower - The borrower must be a North Dakota resident. To be eligible under this
program, the borrower may own no more than 25% of the project.
BND Funding Limit - BND's funding limit is up to 70% of the total loan amount.
Use of Proceeds - The proceeds of the loan shall be used for the purchase of shares in
an ag processing plant intended to process North Dakota grown products.
It is desirable that the plant be located in North Dakota; however, exceptions
may be made based on the overall economic benefits to the state. Project
ownership may be other than a cooperative business structure if the intent
of this loan program is met.
Additional Parameters - An additional use of loan proceeds is for the purchase of equity shares
in a ND feedlot or dairy operation that must feed a byproduct if an ethanol
or biodiesel facility. Loans approved for this purpose are eligible for
an interest buydown of up to 5% which may be used to reduce the borrower’s
interest rate on loans made by a local lender and BND. The total buydown
amount per borrower may not exceed a lifetime cap of $20,000. A farmer
that receives interest buy down from the Ag PACE fund is not eligible to
receive interest buy down under Envest for funds to be invested in the
same project. The lead financial institution and BND set the interest rate
to be yielded by the lenders. The difference between the interest charged
by the lenders (yield rate) and that paid by the borrower (borrowing rate)
is provided to the lenders by one of the funds.
Interest Rate - The interest rate on BND's portion is to float at BND base rate less
1%. The interest rate charged by the lead financial institution on its
share of the loan may not exceed BND's base rate plus 3%.
Term - The term of the loan will be five to seven years depending on the security being offered. Principal payments may be deferred up to two years; however, interest must be paid at least annually.
Application Process - Application by a lead lender is required for BND's participation. See application
for additional documentation required when submitting a request to BND.
Lead lender is responsible for servicing the loan.
Collateral - Adequate collateral will be required. Acceptable collateral may consist of machinery, farm land or similar items with a determinable market value.
Credit Criteria - The borrower must meet the bank's standard credit criteria including demonstrated repayability of all debt.
Maximum Amount - The maximum amount is negotiable.
For more information on this program or other Bank of North Dakota programs,
contact:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5624
1-800-472-2166 ext. 5624
TDD (Telephone Device for the Deaf) 1-800-643-3916
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