No Bank? No Problem: ND Funding Beyond Traditional Loans

Before You Apply Anywhere, Answer Four Questions

1. Are you a startup, an existing business, or an expansion project?
2. Are you considered a primary-sector business, meaning you bring new dollars into North Dakota through activity such as manufacturing, technology, value-added agriculture, energy, tourism, or export-oriented services?
3. Are you located in a rural community?
4. What do you actually need the money for: working capital, equipment, real estate, automation, workforce training, R&D, energy upgrades, or something else?

Those answers will point you toward very different programs.

North Dakota Development Fund (NDDF)

The North Dakota Development Fund (NDDF) is one of the state's most important business financing tools. It exists to provide flexible "gap financing" for new and expanding businesses that may not be able to secure everything they need through conventional financing alone. The fund can use loans and equity investments, and current Commerce guidance says investments may be made through direct loans, participation loans, subordinated debt, and equity investments of up to $3 million.

Best for: Startups, growing companies, rural businesses, primary-sector businesses, and expansion projects with a clear financing gap.

Use it for: Working capital, equipment, real estate, expansion, inventory, and other eligible business growth needs, depending on the specific program.

Angel Match Program

The Angel Match Program is designed for high-growth North Dakota startups raising private angel investment. If a business secures qualified private investment, the state may match investor commitments up to $250,000 per business, generally on a 1:1 basis. The program can use convertible securities or direct equity, which makes it more startup-friendly than a traditional loan.

This is especially useful for founders who are too early for traditional lending but far enough along to attract private investors.

Best for: Early-stage companies raising angel capital.

Good fit for: Software, ag-tech, automation, bioscience, advanced manufacturing, energy technology, and other scalable businesses.

Regional Rural Development Revolving Loan Fund

The Regional Rural Development Revolving Loan Fund supports primary-sector businesses in smaller communities. It is designed for businesses located in communities with fewer than 8,000 people or more than five miles outside city limits. Eligible uses may include working capital, fixed assets, real property, equipment, facilities, and inventory, but not refinancing existing debt.

This is a strong option for rural companies that are creating or retaining jobs but need flexible financing to make the project work.

Best for: Rural primary-sector businesses.

Good fit for: Rural manufacturers, value-added agriculture, technology companies, tourism-related businesses, and companies selling outside their immediate local market.

NDDF Non-Primary Sector Rural Financing

This is one of the biggest updates business owners should know about.

In 2026, the North Dakota Development Fund expanded eligibility to support certain non-primary-sector rural businesses and community projects. Eligible applicants may include for-profit businesses, certain nonprofits, chambers, economic development organizations, and political subdivisions in communities with fewer than 10,000 residents or locations more than five miles outside city limits. Projects must partner with a lead lender, and loan amounts may range from $25,000 to $1 million, not exceeding 40% of total project costs.

That matters because not every important rural business is primary-sector. A grocery store, service business, child care provider, community-serving nonprofit, or local amenity may not export products outside the state, but it can still be essential to keeping a community livable.

Best for: Rural businesses and community projects that may not qualify as primary-sector but fill an important local need.

Good fit for: Main Street businesses, service providers, community facilities, rural amenities, and essential local employers.

Wonder Fund North Dakota

The Wonder Fund North Dakota is a $45 million direct investment program managed by O'Leary Ventures through the North Dakota Development Fund. It targets early-stage businesses headquartered in North Dakota with fewer than 500 employees, and it may also consider out-of-state companies if their product or service has a material impact on North Dakota.

This program belongs on the radar of startup founders who are building scalable companies and looking for investment capital, not just loans.

Best for: Early-stage companies with growth potential.

Good fit for: Technology, software, ag-tech, energy, bioscience, automation, advanced manufacturing, and other scalable ventures.

Did you know? CoSchedule and Bushel have both used the North Dakota Development Fund.

Advance ND

For large industrial projects, Advance ND can help close the deal. The program provides low-interest "deal-closing" loans for value-added energy, value-added agriculture, and manufacturing projects. Eligible projects must have at least $5 million in total project cost, be primary-sector certified, and may receive up to $20 million, not exceeding 20% of total project cost, at a 2% fixed interest rate.

This is not a small startup program. It is built for major projects that can create significant economic impact.

Best for: Large manufacturing, value-added agriculture, and value-added energy projects.

Use it for: Processing facilities, industrial expansions, major production investments, and large job-creating projects.

Bank of North Dakota (BND)

The Bank of North Dakota is one of the state's most unique economic development tools. BND is the only state-owned bank in the nation, and its business programs generally work through local lenders rather than replacing them.

That means business owners usually do not start by applying directly to BND. They start with a local bank or credit union. BND's business lending guidance says the borrower's first contact is the local lender, and that lender initiates the application with BND.

Think of BND as a behind-the-scenes partner that can help reduce risk, buy down interest, or make a project more financeable.

The Bank of North Dakota is the only state-owned bank in the country.

Beginning Entrepreneur Loan Guarantee

The Beginning Entrepreneur Loan Guarantee helps new business owners secure financing by providing a guarantee to the lender. The loan may not exceed $500,000, and eligible uses include real property, equipment, working capital, certain startup expenses, refinancing, and licensed child care.

The guarantee percentage depends on the loan size: 85% up to $150,000, 75% from $150,001 to $300,000, and 50% from $300,001 to $500,000.

Best for: First-time entrepreneurs and startup ventures that have a lender interested in the deal but need extra support.

Good fit for: "Would the Beginning Entrepreneur Loan Guarantee help reduce the risk enough to approve this?"

PACE

PACE, which stands for Partnership in Assisting Community Expansion, helps reduce interest costs for qualifying primary-sector businesses. The program uses funds from BND and a local community partner to buy down the borrower's interest rate. Current BND guidance says the rate may be as much as 5% below the note rate, with a floor of 1%, and BND's buydown may be paired with local community funds.

This can be a powerful tool because lowering the interest rate can improve cash flow during the years when a business is hiring, buying equipment, or absorbing expansion costs.

Best for: Primary-sector businesses expanding in North Dakota.

Good fit for: Manufacturers, value-added agriculture, technology companies, energy-related companies, and businesses creating jobs or making major investments.

Flex PACE

Flex PACE is a more flexible interest buydown program for projects that provide community value. Unlike PACE, it does not require job creation. It can be used by North Dakota businesses for real property, equipment, and certain working capital, with different buydown caps for business, child care, and affordable housing projects.

This is especially important for businesses that may not be primary-sector but still matter deeply to a community.

Best for: Community-benefit projects.

Good fit for: Child care, grocery stores, health care, essential services, affordable housing-related projects, and businesses filling local gaps.

Agriculture and Value-Added Agriculture Programs

BND also offers agricultural lending programs, most of which are initiated through a local financial institution. Its ag programs include tools such as Ag PACE, which can support nontraditional agriculture projects, equipment, facilities, equity shares, irrigation, livestock feedlot, dairy, and tile projects.

For farmers, ranchers, processors, and value-added agriculture businesses, BND should be part of the lender conversation early.

Best for: Producers, beginning farmers, ranchers, ag processors, and value-added agriculture businesses.

LIFT: Legacy Investment for Technology Loan Fund

The Legacy Investment for Technology Loan Fund, better known as LIFT, supports companies commercializing intellectual property in North Dakota. It is aimed at innovation-driven businesses in areas such as advanced computing and data management, agricultural technology, autonomous and uncrewed vehicles, energy, health care, value-added agriculture, and value-added energy.

LIFT is not general working capital for any business. It is for companies with technology, research, or intellectual property that can be commercialized in North Dakota. Eligible uses may include working capital for applied research, experimentation, testing, and operational needs tied to commercialization. Current Commerce guidance says the application period is closed, but future application windows are listed, including July 1-30, 2026; October 5-November 9, 2026; February 2-March 4, 2027; and May 4-June 3, 2027.

Best for: Startups, growing companies, rural businesses, primary-sector businesses, and expansion projects with a clear financing gap.

Good fit for: Working capital, equipment, real estate, expansion, inventory, and other eligible business growth needs.

Not ideal for: Traditional retail, local service businesses, restaurants, or companies without a strong technology or IP component.

Did you know? Be More Colorful received a $500,000 LIFT loan to grow their CareerViewXR platform.

ND Department of Commerce Workforce Grants

Not all business funding is about buying equipment or borrowing money. Sometimes the best capital is money that helps you train people, retain workers, build talent pipelines, or reduce the cost of growth.

The North Dakota Department of Commerce manages a rotating set of grant programs, so business owners should always check current application windows before planning around a specific grant.

Technical Skills Training Grant

The Technical Skills Training Grant supports rapid, non-degree reskilling and upskilling efforts. The application is currently listed as open, and the program requires a 1:1 match. It includes tracks of up to $200,000, $100,000, and $200,000, depending on the type of project, including automation-related training and feasibility work. Eligible applicants include North Dakota colleges and universities, businesses, training providers, nonprofits, municipalities, and trade associations.

Best for: Employers with workforce shortages or new skill needs.

Good fit for: Health care, manufacturing, energy, logistics, skilled trades, technology, automation, and other industries where training costs can slow growth.

Operation Intern

Operation Intern helps expand internships, work experience, and apprenticeships with North Dakota employers. Current Commerce guidance lists up to $5,000 in matching funds on a one-to-one basis, with maximums per funding round and biennium. However, Commerce also notes that all funds for the current funding year have been applied for and new applicants are being waitlisted.

Best for: Employers building a talent pipeline.

Good fit for: Businesses that want to convert students, apprentices, or early-career workers into long-term employees.

Dakota Business Lending

Dakota Business Lending is one of the region's most important nonprofit lending resources. Since 1982, it has served North Dakota small businesses through SBA 504 lending and has expanded into additional financing and support programs. For many business owners, Dakota Business Lending is especially useful when a project involves commercial real estate, construction, renovation, or major equipment.

A Certified Development Company (CDC) is a nonprofit authorized by the SBA to deliver 504 loans, helping small businesses finance real estate and equipment through long-term, fixed-rate funding. These loans are typically structured with 50% bank financing, 40% CDC/SBA funding, and 10% borrower equity, while CDCs also support economic growth and guide businesses through the process.

SBA 504 Loans

The SBA 504 Loan Program is designed for major fixed assets. That includes purchasing commercial real estate, constructing a facility, renovating a building, buying long-term equipment, or making site improvements.

A typical SBA 504 structure includes about 50% from a bank or credit union, up to 40% through the Certified Development Company/SBA portion, and at least 10% borrower equity. Dakota Business Lending lists 10-, 20-, and 25-year terms and notes that SBA 504 can finance up to 90% of eligible projects.

Best for: Business owners buying, building, or expanding a physical location.

Good fit for: Manufacturers, contractors, professional services firms, child care facilities, medical practices, hospitality, warehouses, and companies buying major equipment.

SBA 7(a) Loans

The SBA 7(a) program is SBA's primary business loan program. It is often more flexible than 504 because it can support a broader range of uses, including real estate, working capital, refinancing certain debt, machinery, equipment, furniture, fixtures, supplies, and ownership changes. The maximum loan amount is $5 million.

Best for: Businesses that need flexible financing.

Good fit for: Working capital, business acquisition, partner buyout, equipment, expansion, refinancing, and mixed-use projects that do not fit neatly into an SBA 504 structure.

SBA Microloans

The SBA Microloan program provides smaller loans of up to $50,000, with SBA noting that the average microloan is about $13,000. Funds may be used for working capital, inventory, supplies, furniture, fixtures, machinery, and equipment, but not for paying existing debts or buying real estate.

Best for: Startups and very small businesses.

Good fit for: Home-based businesses, first-time entrepreneurs, small inventory purchases, equipment, supplies, and early operating needs.

North Dakota Opportunity Fund

The North Dakota Opportunity Fund is a gap-financing program administered by the Lewis & Clark Development Group. It is designed to help small businesses and manufacturers access capital by leveraging private lending and filling financing gaps. The program serves 38 North Dakota municipalities.

Eligible uses include construction, equipment, working capital, real estate, and interim SBA 504 financing. Current program guidance says loans cannot exceed $1 million or 50% of project cost.

A 2026 update also increased the interim SBA 504 financing cap from $375,000 to $500,000, not exceeding 50% of the interim SBA 504 loan.

Best for: Businesses in participating communities that have a lender but still need a gap filled.

Good fit for: Expansions, equipment purchases, building improvements, working capital, construction, and SBA 504 bridge needs.

Ask your lender: "Is there a gap that the North Dakota Opportunity Fund could help fill?"

About the Lewis & Clark Development Group: The Lewis & Clark Development Group (LCD Group) is a North Dakota-based nonprofit driving economic growth through financing, planning, and development services. It administers programs like the ND Opportunity Fund, partnering with communities and lenders to deliver gap financing, SBA 504 loans, and revolving funds. LCD Group also supports housing, infrastructure, and rural projects through strategic planning and grant expertise.

Local Incentives and Tax Tools

Business owners often search for grants and overlook tax incentives. That can be a costly mistake. A property tax exemption, income tax exemption, sales tax exemption, or Renaissance Zone benefit may not feel like "funding," but it can improve cash flow, reduce project cost, and make a lender more comfortable with the deal.

City of Fargo Business Incentives

The City of Fargo lists business incentives that include tax incentives, PILOTs, tax credits, Renaissance Zone tools, and property tax exemptions designed to encourage development and rehabilitation of commercial and residential property.

Fargo's Renaissance Zone program can provide qualified projects with a five-year property tax exemption and state income tax exemption within the approved zone. The city says more than 200 Renaissance Zone projects have been approved since 1999.

Best for: Fargo businesses investing in real estate, rehabilitation, downtown projects, commercial redevelopment, or expansion.

Statewide Renaissance Zone

Renaissance Zone benefits are not limited to Fargo. North Dakota's statewide Renaissance Zone program allows cities to use state and local tax incentives for qualified projects, generally for up to five years. Eligible activities may include purchase, rehabilitation, new construction, lease, leasehold improvements, public infrastructure, and historic preservation.

Best for: Businesses investing in downtowns or approved redevelopment areas across North Dakota.

New or Expanding Business Income Tax Exemption

North Dakota's New or Expanding Business Income Tax Exemption may provide up to five years of income tax exemption for qualifying primary-sector or tourism businesses. Applications go through the State Board of Equalization, with Commerce reviewing eligibility.

Best for: Primary-sector or tourism businesses starting, expanding, or relocating in North Dakota.

Research Expense Credit

Companies conducting qualified research in North Dakota should review the state's Research Expense Credit. North Dakota's tax guidance describes a credit for qualified research expenses in the state, including 25% of the first $100,000 of excess qualified research expenses over the base amount and 8% beyond that.

Best for: Companies investing in R&D.

Good fit for: Software, bioscience, advanced manufacturing, ag-tech, energy, and product development companies.

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.

Sales and Use Tax Exemptions

Before buying equipment or building a facility, business owners should ask whether a sales or use tax exemption applies. North Dakota lists exemptions for equipment used in new or expanding manufacturing, agricultural processing, and recycling operations, as well as exemptions for certain computer and telecommunications equipment used by certified primary-sector businesses and data center equipment.

Best for: Manufacturers, ag processors, data centers, and certified primary-sector businesses.

Important reminder: Some incentives require approval before the purchase or project begins. Talk to your CPA, lender, and local economic development office early.

SBIR and STTR: Federal R&D Funding

For research-driven companies, the Small Business Innovation Research and Small Business Technology Transfer programs may be among the best funding opportunities available.

SBIR and STTR are often described as America's Seed Fund. They provide non-dilutive federal funding, meaning participating companies do not give up equity, and participating small businesses can keep equity and intellectual property while developing technology with commercialization potential.

The programs involve 11 federal agencies. As of April 2026, agencies may issue Phase I awards up to $323,090, and Phase II awards up to $2,153,927 without SBA approval.

SBIR allows the small business to lead the R&D work. STTR requires a formal collaboration with a nonprofit research institution, such as a university or federal lab.

Best for: Technology companies developing something novel.

Good fit for: Defense, health care, energy, software, cybersecurity, biotech, ag-tech, robotics, sensors, advanced manufacturing, aerospace, and scientific innovation.

Not ideal for: Businesses that are not doing research, technical development, or innovation with commercialization potential.

Notable companies to use SBIR/STTR funding: Qualcomm, Symantec, and iRobot.

USDA Rural Development

For rural North Dakota businesses, USDA Rural Development should be part of the conversation. USDA business programs provide financial backing and technical assistance to rural businesses, cooperatives, farmers, ranchers, public bodies, nonprofits, and Tribes through loans, guarantees, and grants. USDA programs can be especially valuable because so much of North Dakota is rural, and many businesses that do not fit a "startup" profile may still qualify for rural development tools.

Business & Industry Loan Guarantees

The Business & Industry Loan Guarantee program improves access to capital in rural communities by providing loan guarantees that enable commercial lenders to provide financing for rural businesses.

Best for: Rural businesses that have a lender but need additional support to make the loan work.

Good fit for: Business expansion, acquisition, modernization, working capital, and rural facilities.

Value-Added Producer Grants

Value-Added Producer Grants help agricultural producers enter value-added activities related to processing and marketing new products. The goals are to generate new products, create and expand marketing opportunities, and increase producer income.

Best for: Producers turning commodities into higher-value products.

Good fit for: Food products, branded farm products, specialty crops, meat processing, dairy products, fiber products, and other value-added agricultural ventures.

Rural Energy for America Program

The Rural Energy for America Program, commonly known as REAP, provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems and energy efficiency improvements. This can be a major opportunity for businesses facing high utility costs or planning energy upgrades.

Best for: Agricultural producers and rural small businesses.

Good fit for: Solar, energy efficiency, grain dryer upgrades, lighting, HVAC, refrigeration, insulation, pumps, and other eligible energy-saving investments.

Rural Microentrepreneur Assistance

The Rural Microentrepreneur Assistance Program helps rural microbusinesses through intermediary organizations that provide revolving loan funds and technical assistance. USDA's business program list includes RMAP as part of its rural business support tools.

Best for: Very small rural businesses.

Good fit for: Main Street startups, solo entrepreneurs, small service businesses, and rural businesses with fewer employees.

Rural Business Development Grants

Rural Business Development Grants are not usually direct grants to for-profit businesses. Instead, they support eligible entities such as public bodies, nonprofits, and Tribes that provide economic development and job creation support in rural areas. Funds may support business opportunity grants and business enterprise grants for rural business and community projects.

Best for: Communities, nonprofits, Tribes, and development organizations that support entrepreneurs.

Important reminder: Feasibility studies, technical assistance, business counseling, training, revolving loan funds, incubators, and community-based development projects.

Native American Business Resources

A statewide North Dakota funding guide should include Native entrepreneurs and Tribal communities directly.

Native American Development Center

The Native American Development Center supports Native American communities in North Dakota through financial education and affordable lending services. Its loan programs include micro-enterprise business loans and credit builder loans for enrolled Tribal members residing in North Dakota.

NADC's micro-enterprise business loan information says applicants must own a business structured as a corporation, sole proprietorship, LLC, or partnership operating within North Dakota.

Best for: Native American entrepreneurs and Tribal members building or growing a business in North Dakota.

Good fit for: Startup costs, working capital, credit building, and small business owners who may not qualify for conventional bank financing.

Native American Small Business Support Program

The Native American Small Business Support Program from the North Dakota Department of Commerce announced $600,000 to support Native American-owned small businesses in North Dakota. Eligible applicants must be Native American-owned businesses with at least 51% ownership, for-profit entities with fewer than 500 employees, located and operating in North Dakota, and in good standing with state and federal requirements.

Because state grant programs operate in rounds, business owners should confirm the current application deadline and availability before relying on it.

Best for: Native American-owned small businesses in North Dakota.

Good fit for: Existing businesses seeking growth, sustainability, competitiveness, and community impact.

No-Cost Advising and Navigation Resources

Sometimes the best first move is not applying for money. It is getting help figuring out which money fits.

North Dakota SBDC

The North Dakota Small Business Development Centers provide no-cost, confidential, personalized, in-depth business advising to existing businesses and entrepreneurs. The goal is to help owners make informed decisions to start, manage, grow, or sustain a business.

Best for: Any business owner unsure where to begin.

Good fit for: Business plans, financial projections, loan preparation, market research, startup planning, growth strategy, succession, and problem-solving.

ND APEX Accelerator

The ND APEX Accelerator helps businesses pursue government contracting. Services include SAM registration assistance, SBA profile help, government certification assistance, market research, procurement training, bid matching, and advice on bids, proposals, and related documents.

Best for: Businesses that want to sell to government buyers.

Good fit for: Construction, professional services, manufacturing, technology, logistics, maintenance, consulting, food service, and suppliers that could serve federal, state, local, military, or prime-contractor customers.

SBA North Dakota District Office

The SBA North Dakota District Office helps businesses access federal and state resources, find lenders, and connect to local assistance. SBA district offices also provide small business counseling, training, and tools to start or grow a business through SBA and partner resources.

Best for: Owners navigating SBA loans, lender connections, counseling, certifications, or federal small business resources.

Vault North Dakota

Vault North Dakota is a searchable resource built to help entrepreneurs and business owners find small business financing programs and resource providers across the state. Dakota Business Lending describes it as a place where business owners can see financing programs, resources, and "hidden gems" North Dakota has to offer.

What to Prepare Before You Apply

Business owners can save weeks of frustration by preparing before they chase funding.

At a minimum, gather:

• A clear project description
• A business plan or lean canvas
• Two to three years of financial records
• Current profit-and-loss statement
• Current balance sheet
• Personal financial statement
• Tax returns
• Project budget
• Equipment quotes or construction estimates
• Sources and uses of funds
• Job creation or retention estimate
• Ownership information
• Entity documents
• Pitch deck, for startup or equity programs
• Lender letter or term sheet, if the program requires lender participation

For innovation programs, add:

• Customer discovery notes
• Market research
• Prototype plan
• Commercialization plan
• Intellectual property status
• Technical milestones
• Revenue model
• Investor materials

For tax incentives, add:

• Project location
• Timeline
• Purchase dates
• Construction dates
• Expected investment
• Job numbers
• Whether approval is needed before the project begins

Questions to Ask Before You Apply

Questions to ask your banker:

• "Would Bank of North Dakota participation help this deal work?"
• "Could PACE or Flex PACE lower the interest rate?"
• "Would SBA 504 be better than a conventional real estate loan?"
• "Would SBA 7(a) be a better fit because I need working capital?"
• "Is there a gap that NDDF or the North Dakota Opportunity Fund could fill?"
• "Would USDA be an option because of our rural location?"
• "Should we check tax exemptions before buying equipment?"
• "Could a local economic development office support this?"
• "Do I need to talk with the SBDC before submitting projections?"

Questions to ask your local economic developer:

• "Is this property in a Renaissance Zone?"
• "Does the city offer property tax exemptions, PILOT, TIF, or local development funds?"
• "Is there a local revolving loan fund?"
• "Would the city or county provide matching funds for PACE or Flex PACE?"
• "Are there downtown, façade, signage, or rehabilitation incentives?"
• "Can you help connect me with Commerce, BND, USDA, SBDC, or Dakota Business Lending?"