Beyond The Bank: Local Options Outside of Traditional Fundraising · Fargo INC!
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Beyond The Bank: Local Options Outside of Traditional Fundraising
Let’s be honest: most entrepreneurs in Fargo and across the region know exactly what to do when it’s time to get serious about money—call their banker. But what if you need more capital than they can
In shortLet’s be honest: most entrepreneurs in Fargo and across the region know exactly what to do when it’s time to get serious about money—call their banker. But what if you need more capital than they can
3 things to know
1Let’s be honest: most entrepreneurs in Fargo and across the region know exactly what to do when it’s time to get serious about money—call their banker.
2But what if you need more capital than they can get you?
3This is your go-to guide for funding your business on your terms—without relying solely on the bank.
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Let’s be honest — most entrepreneurs in Fargo and across the region know exactly what to do when it’s time to get serious about money—call their banker. But what if you need more capital than they can get you?
This is your go-to guide for funding your business on your terms—without relying solely on the bank. These are the grants, loans, credits, funds, and even quirky programs that are built to serve real people with real ideas.
Administered by — North Dakota Department of Commerce
Purpose — Designed to provide flexible “gap” financing to businesses that can’t fully secure needed funds through conventional lenders.
The North Dakota Development Fund (NDDF) was created in 1991 by the North Dakota Legislature to address a critical need: access to flexible capital for startups and expanding businesses that don’t fully qualify for traditional bank financing. Administered by the North Dakota Department of Commerce, the fund provides “gap financing”—support that bridges what a bank is willing to lend and what a business actually needs to get off the ground or scale up.
Rather than just offering loans, NDDF distinguishes itself through a mix of equity investments, loans, and convertible debt instruments, giving the state the ability to strategically partner with companies rather than simply act as a lender.
Over the past three decades, the North Dakota Development Fund has catalyzed hundreds of millions of dollars in economic activity by supporting more than 400 businesses across tech, manufacturing, retail, healthcare, and services.
Its blend of public funding and private partnerships means the fund often works alongside banks, investors, and local development corporations. This collaboration not only multiplies the impact of state dollars but also keeps capital recycling within the North Dakota economy
Did You Know?:
The North Dakota Development Fund can provide equity investments—not just loans!
These companies have used the North Dakota Development Fund!
The North Dakota Development Fund can provide equity investments—not just loans!
CoSchedule is a Bismarck-based marketing tech firm, benefited from early-stage support that helped expand its team and roll out its platform nationwide.
Bushel is a Fargo ag-tech company, leveraged matched funding during its formative years to develop software solutions for grain elevators and cooperatives.
Key Offerings:
Angel Match Program
Goal: Boost the availability of early-stage capital by matching private angel investments.
How it works:If a North Dakota-based startup secures investment from an accredited angel investor, the NDDF can provide a matching investment—typically up to $250,000.
Who it helps: High-growth startups needing a stronger capital base to accelerate early operations or product development.
Funding Type: Convertible notes or equity investments.
Regional Rural Revolving Loan Fund
Focus: Encouraging job creation and retention in rural North Dakota.
Eligibility:Businesses operating in communities of less than 8,000 people.
Loan Features: Fixed-rate loans (usually low-interest), often combined with local development group or bank participation.
Use Cases: Equipment, real estate, working capital, and facility improvements.
Child Care Loan Program
Objective: Expand the state’s childcare infrastructure to support working families.
Eligible Applicants: Licensed or registered child care providers (both new and existing).
Financing Details: Low-interest loans of up to $100,000 for facility renovations, expansions, or equipment.
Repayment: Terms can be flexible, including deferred payment options during startup or ramp-up phases.
Did You Know?:
Bank of North Dakota is the Only state-owned bank in the U.S.
Bank Of North Dakota (BND)
About
Founded in 1919 in response to populist movements and farmer demands for fair credit, the Bank of North Dakota (BND) is the only state-owned bank in the United States. Headquartered in Bismarck, BND is not a retail bank—you won’t find branches or checking accounts—but rather a wholesale bank that works behind the scenes, partnering with local financial institutions to expand access to affordable capital throughout North Dakota.
Its mission is economic development—not profit—and it consistently reinvests earnings into programs that benefit businesses, farmers, students, and communities across the state.
More than a century after its founding, BND has:
Returned over $1.5 billion in profits to the state’s general fund
Maintained a strong, conservative financial rating, with assets surpassing $10 billion
Helped support more than a third of small businesses in the state indirectly through loan participations or guarantees.
During economic downturns and natural disasters, BND has stepped in with specialized loan programs to stabilize communities—something few other institutions can do at scale with such speed.
Unique Feature — Only state-owned bank in the U.S
Role — Primarily partners with local banks and credit unions, offering loan guarantees and interest buydowns to reduce risk and support entrepreneurship.
Flagship Programs:
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Beginning Entrepreneur Loan Guarantee Program
Guarantee Coverage: Up to 85% of the loan amount for qualifying borrowers.
Target Group: First-time business owners and startup ventures, especially in rural communities.
Partner Structure: Local banks originate the loan, and BND backs it, making it easier for entrepreneurs to secure funding.
Eligible Uses: Startup costs, equipment, working capital.
Pace (Partnership in Assisting Community Expansion) and Flex Pace
Purpose: To make borrowing more affordable by reducing interest rates.
Pace: Used for business expansion that results in job creation. The local community provides matching funds for interest buydowns.
Flex Pace: Offers more flexibility in eligibility—can be used for projects that may not create new jobs but have community value (e.g., essential services like grocery stores or health clinics).
Mechanism: BND buys down the interest rate by 5% (max $500,000) with local economic development corporations contributing a portion.
Agricultural Loans
Ag Pace: Designed to support value-added agriculture by lowering interest rates for projects like ag processing or distribution.
Beginning Farmer Real Estate Loans: Available to new farmers looking to purchase farmland.
Livestock Purchase Loans: Assists ranchers in building herd capacity
Support: Loans are offered in collaboration with FSA, USDA, and local banks..
Managed By — ND Department of Commerce
Mission — Encourage commercialization of intellectual property and tech-based entrepreneurship within North Dakota.
Innovation Technology Loan Fund (LIFT)
About
The Innovation Technology Loan Fund (LIFT) is one of North Dakota’s most forward-looking funding programs, aimed at accelerating the commercialization of intellectual property (IP) and fostering technology-driven entrepreneurship.
Established under the North Dakota Department of Commerce, the fund is designed not just to provide capital, but to de-risk innovation, support long-term growth, and help early-stage companies transform breakthroughs into business.
The goal? To ensure high-potential tech ventures grow roots in North Dakota, contribute to job creation, and stimulate the state’s broader innovation ecosystem.
Priority industries include:
Biotechnology & Life Sciences
Software & SaaS
Clean Energy & Renewables
Autonomous Systems & Robotics
Advanced Manufacturing & Materials Science
This program is not limited to startups, but is primarily focused on innovation-driven businesses that plan to base or expand operations in North Dakota.
Did You Know?
In 2022, Be More Colorful received a $500,000 LIFT loan to grow their CareerViewXR platform!
Program Overview:
Target Audience: Technology, research-based, or IPheavy companies—especially in biotech, software, advanced manufacturing, clean energy, and automation.
Loan Terms: Low-interest or interest-free for an initial period (typically the first 3–5 years).
Loans may be partially forgivable if specific milestones (job creation, revenue thresholds, relocation of operations) are met.
Capital Range: Awards often range from $100,000 to $1 million+ depending on scope and potential impact.
Use Cases: Product development, scale-up, market testing, or production ramp-up in North Dakota.
Focus — Workforce development, business expansion, and community infrastructure.
North Dakota Department Of Commerce Grant Programs
About
The North Dakota Department of Commerce manages a suite of targeted grant programs designed to support workforce development, business growth, and community sustainability. These programs are built to address real-time economic needs—particularly in sectors experiencing talent shortages—and to give employers the resources to recruit, train, and retain a qualified workforce.
By combining state funds with employer engagement, these grants help companies remain competitive while also strengthening North Dakota’s economic resilience.
These grant programs are more than just short-term fixes—they are strategic tools that help North Dakota stay competitive in a rapidly changing labor market. By funding skill-building and early career experiences, the Department of Commerce is investing in both the people and businesses that drive North Dakota’s economy forward.
Program Overview:
Technical Skills Training Grant
Goal: Rapidly upskill or reskill workers—especially in sectors facing workforce shortages.
Eligible Applicants: Private sector businesses, consortiums, or training providers.
Preferred Sectors: Healthcare, energy, manufacturing, logistics, and skilled trades.
Operation Intern
Purpose: Increase internship and apprenticeship opportunities for students and jobseekers.
How it Works: Reimburses up to 50% of wages (capped per intern) for qualifying internships.
Eligibility: Must be a North Dakota-based business. Intern must be enrolled in a North Dakota college or university or be a recent graduate.
Max Reimbursement: Up to $3,000 per intern, with limits per business per year.
Type: Certified Development Company (CDC)
Mission — Empower small businesses through access to capital, especially in underserved or rural areas.
Dakota Business Lending
About
Dakota Business Lending is a federally certified Certified Development Company (CDC), operating primarily in North Dakota and surrounding states. As a CDC, its core mission is to facilitate small business growth and job creation by offering long-term, fixed-rate financing through U.S. Small Business Administration (SBA) programs—most notably the SBA 504 Loan Program.
Founded in 1982, Dakota Business Lending (formerly Dakota Certified Development Corporation) is North Dakota’s oldest and largest CDC. It plays a vital role in connecting entrepreneurs with flexible, affordable capital options, especially those in rural areas who may struggle to secure traditional financing.
Their portfolio extends beyond 504 loans, including microloans, specialized funding for veterans and Native American entrepreneurs, and targeted pandemic recovery programs.
Did You Know?
Last month, we featured six entrepreneurs from a Dakota Business Lending cohort. Check it out!
What is a Certified Development Company (CDC)?
A Certified Development Company (CDC) is a nonprofit organization authorized by the U.S. Small Business Administration (SBA) to administer SBA 504 loans, a financing program designed to help small businesses acquire fixed assets like real estate and equipment. CDCs work in partnership with local lenders and the SBA to provide longterm, fixed-rate financing at favorable terms. Typically, the structure includes a bank loan (50%), a CDCs portion funded through SBA-backed debentures (40%), and a borrower equity injection (10%). CDCs are mission-driven and focus on economic development, job creation, and supporting small businesses within their designated region. They also guide business owners through the 504 loan process, helping them navigate federal requirements and tailor financing to their growth needs.
Key Offerings:
Microloan Program
Loan Size: Typically under $50,000—ideal for startups, early-stage, or home-based businesses.
Terms: Competitive fixed interest rates, terms up to 10 years.
Eligible Uses: Working capital, inventory, equipment, furniture, or minor renovations.
Funding Type: Convertible notes or equity investments.
SBA 504 Loan Program
Structure: 50% local lender, 40% Dakota Business Lending (backed by SBA), 10% borrower down payment.
Projects: Real estate purchases, construction, major equipment.
Advantages: Low down payments, long-term fixed rates, and low fees.
Specialized Programs: These include Veteran Entrepreneur Loans, COVID Recovery Loans, and Native American Lending Programs.
Type — Reimbursement Voucher & Coaching Program.
Administered By — North Dakota Department of Commerce.
Innovate ND
About
Innovate ND is North Dakota’s flagship idea-stage innovation program, designed to support entrepreneurs as they move from concept to commercialization. Administered by the North Dakota Department of Commerce, Innovate ND provides a structured pathway for early-stage founders through a combination of reimbursable vouchers, expert coaching, and access to the state’s startup support network.
Whether you’re building your first prototype, testing the market, or refining a business model, Innovate ND helps reduce risk and increase readiness—at zero equity cost to the entrepreneur
Overview:
Innovate ND is designed to help North Dakota entrepreneurs take an idea from concept to commercialization through a combination of financial support and expert mentorship.
Voucher-based Reimbursement:
Entrepreneurs are eligible for up to $24,000 in reimbursable vouchers over the course of four phases
These vouchers can cover expenses such as Market validation, Prototype development, Legal/IP services, Marketing strategy, and Business model validation.
Status — Applications are currently closed until July 2025. It’s still a good time to prepare your pitch deck, business plan, and network with the ECND centers to be ready when it reopens.
Type — Tax & Development Incentives.
Administered By — City of Fargo, in collaboration with the Fargo-Moorhead Economic Development Corporation
City Of Fargo Business Incentives
About
The City of Fargo offers a suite of tax and development incentives designed to encourage business investment, real estate redevelopment, and long-term economic vitality. Administered by the city in collaboration with the Greater Fargo-Moorhead Economic Development Corporation (FM EDC), these programs aim to make Fargo a financially strategic location for both new and expanding businesses.
Whether you’re launching a startup, rehabbing a downtown building, or developing a large commercial or industrial site, Fargo’s business incentive programs can lower entry costs, improve project feasibility, and extend your capital runway
Did You Know?:
For Renaissance Zone, PILOT, TIF, and BID support, contact the City of Fargo’s Planning and Development Department at planning@ fargond.gov
For expansion-related projects, job creation, or industrial development, contact the Greater Fargo Moorhead Economic Development Corporation at info@fmedc.com
Incentives Offered:
Pilot (Payments In Lieu Of Taxes)
Property tax exemptions on improvements for a defined period. Used to stimulate large-scale commercial, mixed-use, or industrial developments.
Tax Increment Financing (TIF)
Used for redevelopment or infrastructure upgrades. Captures the increased property tax value over time to reimburse project costs
Renaissance Zone Program
Offers 5-year property and state income tax exemptions for new construction, substantial rehabilitation, or business investment in the designated zone.Aimed at encouraging urban renewal in downtown Fargo.
Business Improvement District (BID) Support
Helps businesses located in the BID access grants for beautification, signage, or public-facing improvements.
Managed By — Federal agencies like NIH, NSF, DOE, DoD, etc.
Goal — Fund high-risk R&D by small businesses with strong commercialization potential.
Small Business Innovation Research (SBIR) & Small Business Technology Transfer (STTR)
About
The SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs are federal funding initiatives that support high-risk, highreward research and development (R&D) by U.S.-based small businesses. These programs are often described as America’s Seed Fund because they provide non-dilutive capital to help entrepreneurs turn advanced ideas into market-ready products or technologies.
Managed by 11 federal agencies—including the National Institutes of Health (NIH), National Science Foundation (NSF), Department of Energy (DOE), and Department of Defense (DoD)—these programs offer a structured, multi-phase pathway from proof-of-concept to commercialization.
Notable Companies To Use SBIR / STTR Funding
In the late 1980s, Qualcomm used early SBIR funding from the Department of Defense to develop its core CDMA wireless technology, which became the foundation of modern cellular communication.
Symantec grew into a household name in antivirus and cybersecurity before its enterprise division was acquired by Broadcom.
iRobot developed military robots and later consumer products like the Roomba.
Key Differences
SBIR — Allows small businesses to perform R&D and retain IP rights.
STTR — Requires collaboration with a nonprofit research institution (like a university or federal lab).
Program Structure
Phase I — Proof-of-concept funding. Typically up to $150,000–$250,000 for 6–12 months.
Phase II — Further development (prototyping, trials). Funding up to $1 million+ for up to 2 years.
Phase III — Commercialization stage—no SBIR/STTR funds, but federal support may help with procurement contracts.
USDA Rural Development Programs
About
USDA Rural Development (RD) is a federal initiative under the U.S. Department of Agriculture that provides funding, loan guarantees, and technical support to strengthen the economic and social fabric of rural America. While USDA RD is best known for housing and infrastructure programs, it also plays a significant role in supporting small businesses, cooperatives, and agricultural innovation in communities with populations under 50,000.
With over 40 different programs aimed at rural development, USDA RD’s business-focused offerings help local entrepreneurs access capital, reduce energy costs, and add value to agricultural production.
Purpose — Support economic development, infrastructure, and quality of life in rural America—including business ventures.
Business-Focused Programs:
Business & Industry (B&I) Loan Guarantees
For expanding, purchasing, or improving businesses.
USDA guarantees up to 80% of the loan.
Eligible borrowers: for-profit businesses, cooperatives, tribes, public bodies.
Rural Energy For America Program (REAP)
Provides grants and loan guarantees for energy efficiency upgrades and renewable energy systems.
Example: Solar panels, grain dryer upgrades, LED conversions.
Value-Added Producer Grants (VAPG)
Designed for agricultural producers creating products from raw ag goods (e.g., cheese from milk, jam from fruit).
Funding can be used for marketing, working capital, or feasibility studies
Rural Microentrepreneur Assistance Program (RMAP)
Supports very small rural businesses (<10 employees) with technical assistance and microloans.
Editor of Fargo INC! — covering the founders, companies, and ideas shaping business in Fargo-Moorhead. Eleven years in, still no opinions, no politics, all business.
