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Community Advantage Loan Program in North Dakota
By: Al Haut
Lender Relations Specialist
North Dakota District Office
SBA works with lending partners - typically banks and credit unions as well as some community development organizations - to help entrepreneurs secure funds for starting or expanding their small business. The SBA's participation reduces risk and enables the lender to provide financing to small businesses when funding is otherwise unavailable on reasonable terms.
One such guaranty program is Community Advantage, a pilot initiative aimed at increasing the number of SBA lenders who serve underserved communities. The program targets financial institutions which are focused on economic development and were previously not able to offer SBA loans.
Through this program, SBA helps the Community Advantage lender make loans to small businesses in one of the following categories:
- located in, or that have more than 50 percent of their workforce residing in, a Low-to-Moderate Income (LMI) community;
- located in an Empowerment Zone or Enterprise Community;
- located in a HUBZone
- in operation for no more than 2 years;
- owned and controlled by:
- a veteran,
- an active duty military participating in TAP,
- a reservist or National Guard member,
- a spouse of any of these groups,
- a widowed spouse of a service member who died while in service,
- a widowed spouse of a veteran who died of a service-connected disability.
Community Advantage offers a streamlined application process for loans up to $250,000. These loans can be used for a variety of general business purposes, including working capital and purchases of equipment and real estate. In guaranteeing the loan, the SBA assures the lender that if the borrower does not repay the loan, the government will reimburse the lender for its loss, up to the percentage of the SBA's guaranty. The borrower, however, remains obligated for the full amount due.
The Community Advantage lender in North Dakota is Dakota Certified Development Corporation (DCDC). DCDC is a statewide organization and provides a variety of financing programs. As a Community Advantage lender, DCDC is charged with providing borrowers management and technical assistance to help them succeed. DCDC has a working relationship with several counseling resources and works with borrowers on referrals to the provider that best fits their needs.
For more information, contact Dakota Certified Development Corporation at 1-800-611-8997.
Al Haut has been a Business Development Specialist and Loan Officer for the U.S. Small Business Administration since 1989, having received a Bachelor of Science and Masters of Business Administration from Minnesota State University-Moorhead. He grew up working in his family's small business and is still involved as a partner. Al is also an adjunct professor with the University of Mary - Fargo. He can be reached at firstname.lastname@example.org.
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