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REDI Fund

REDI Funds

Revolving Economic Development and Initiative

South Dakota’s REDI (Revolving Economic Development and Initiative) Fund is South Dakota’s flagship financing tool. It is available to start-up firms, businesses that are expanding or relocating in South Dakota, as well as local economic development corporations. This low-interest loan can provide up to 45% of a project’s total cost and requires a 10% minimum equity contribution. Projects can include: land purchases; site improvements; construction, acquisition or renovation of a building; or to the purchase and installation machinery and equipment.

How it Works

The REDI Fund provides up to 45% of a project’s total cost. Companies should secure interim (construction) financing, matching funds for permanent financing, and be able to provide a 10% minimum equity contribution before applying to the Board of Economic Development.

Use of Funds

Projects can include: land purchases; site improvements; construction, acquisition or renovation of a building; or to the purchase and installation machinery and equipment.

Ineligible costs include:

  • Refinancing existing debt
  • Short-term, interim financing for the construction or acquisition phase of a project
  • Trade receivables
  • Inventory
  • Working capital needs
  • Preliminary design stage costs, including but not limited to, market research, written cost estimates, business plan development
  • Preliminary product development costs

Terms

The REDI Fund loan program offers fixed-rate interest, currently 2%. Loans may be amortized up to 20 years on land and buildings and up to 10 years on equipment, with a balloon payment due after five years.

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