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Beginning Entrepreneur Loan Guarantee Program

This program assists in business start-up financing by providing a financial institution with guaranty of a loan not to exceed $200,000. Please refer to the Guarantee section below for specific guaranty percentages.

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Lead Lender - Any lending institution that is related or funded under the laws of North Dakota or the United States. The lead lender is responsible for submitting a Beginning Entrepreneur Loan Guarantee Program Lender Payment History Form to BND.

Borrower - A North Dakota resident, who has graduated from high school or received a general equivalency certificate, and has had some training by education or experience in that type of revenue producing enterprise. The applicant(s) must have a net worth of less than $300,000 or $500,000 for licensed child care facility loan applicants.

Guarantee - Bank of North Dakota may provide a loan guaranty based upon the following schedule:

 
Maximum Loan Amount
Maximum Guaranty Percentage
 Up to $100,000
85%
 From $100,001 to $150,000 
80%
 From $150,001 to $200,000
75%

The maximum loan or loans to an individual borrower may not exceed $200,000.

Use of Loan Funds – Loan proceeds guaranteed under this program may be used to finance the purchase or improvements of real property, equipment or personal property, working capital needs, or child care home, group or center licensed by the Department of Human Services

The Bank may approve a guarantee on a loan up to $5,000 to a beginning entrepreneur for business start-up expenses including accounting, legal and business planning. The Bank may approve a guarantee on a loan up to $25,000 without requiring collateral for the loan.

The program may be used to refinance or consolidate debt provided the amount of the refinance or consolidation does not exceed 20% of total loan to be guaranteed.

Term - The guarantee term may not exceed 5 years.

Guarantee Fee - The fee is .5% per year or a one-time fee of 2% of the guaranteed portion. The guarantee fee may be included in the loan or in the rate charged by the lender.

Application Process - Application by a lead lender is required to apply for BND's guarantee. See application for additional documentation required when submitting a request to BND. The lead lender is responsible for servicing the loan.

Interest Rate - The originating lender must charge an interest rate acceptable to BND. The guarantee fee may be included in the loan or in the rate charged by the lender.

Other Features - This program can be used in conjunction with other BND loan programs.

For more information please contact us at:

Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
701.328.5777
800.472.2166 ext. 328.5777
TDD (Telephone Device for the Deaf) 800.643.3916