While the first pooled bond issue was granted by the Economic Development Finance Authority (EFDA) in 1986, the board its self was created in 1978. Its purpose was, and remains, to make loans to South Dakota businesses for the acquisition of land, construction or reconstruction of buildings and fixtures, and the acquisition of machinery and equipment to stimulate economic growth.
In 1978, the legislature appropriated $2.5 million to the Capital Reserve Account. In 1988, the South Dakota Legislature passed a bill allowing the Finance Authority to borrow money from the REDI Fund for the purpose of increasing the Capital Reserve Account. This money allows the Finance Authority increased lending ability without an appropriation of additional state funds.
Today, EFDA issues both pooled and stand-alone bond issues and the state's Capital Reserve Account holds $5 million for these purposes.