SBA Guaranteed Loan Purchase Program
The SBA Loan Purchase Program is designed to provide low interest rate loans to North Dakota businesses receiving an SBA loan guarantee. This program permits Bank of North Dakota (BND) to purchase the SBA guaranteed portion of the loan.
BND will purchase the outstanding balance of the SBA guaranteed portion of any loan. BND's purchase is conditioned upon the borrower receiving the benefit of the lower interest rate.
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Qualifying Requirements
Borrower - Companies qualifying for this program shall be involved in production, manufacturing, processing or retail trade.
Loan Limit - There are no maximum loan parameters for borrowing under this program.
Use of Proceeds - Loan funds may be used to purchase or refinance real property and equipment, expand existing facilities, and meet working capital requirements, including inventories.
Application Process
Application by a lead lender is required for BND's participation. Lead lender is responsible for servicing the loan. Financial information about the borrower is not necessary.
Interest Rate
BND will purchase the loan guarantee at a variable or fixed rate option. Service fees as described below may be added to BND's net rate options. BND's purchase is conditioned upon the borrower receiving the benefit of the lower interest rate.
BND's Net Rate Options:
- Fixed rate option - Equal to BND's Guaranteed Fixed Rate Index. If the term of the loan exceeds five (5) years, only the first five (5) years can be set at the fixed rate option. Thereafter, the loan will readjust to 1.50% below Wall Street Journal Prime, adjusted daily, monthly, or quarterly.
- Variable rate option - 1.50% below Wall Street Journal Prime, adjusted daily, monthly, or quarterly.
Fees
An originating bank may charge a service fee up to .5%. In addition, the SBA requires an ongoing guarantee fee. These fees are added to the rate options listed above.
BND is to receive a $250.00 set-up fee.
Repayment Terms
The term of the loan is contingent upon the agreement set between the borrower and SBA.
For more information please contact us at:
Bank of North Dakota
1200 Memorial Hwy
PO Box 5509
Bismarck, ND 58506-5509
(701) 328-5635
1-800-472-2166 ext. 5635
TDD (Telephone Device for the Deaf) 1-800-643-3916
