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South Dakota USDA Rural Development - Fall 2018 Edition
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 U.S. Secretary of Agriculture Sonny Perdue and Administrator Linda McMahon, the head of the Small Business Administration (SBA), signed a Memorandum of Understanding (MOU) between the U.S. Department of Agriculture (USDA) and the SBA to promote stronger businesses and agricultural economies in rural America.
In South Dakota, USDA Rural Development (RD) and SBA held joint training sessions throughout the year for lenders
to learn about programs and products available to support business lending in
South Dakota and hosted a rural lending roundtable for lenders, businesses, and economic developers.
USDA RD
staff explained the Business & Industry (B & I) and the Rural Energy
for America Program (REAP) guaranteed programs and how lenders can use them to
expand their portfolio, while maintaining the personal contacts through
servicing. Lenders learned about using Farmer Mac as a
secondary market, using lender participation to extend your loan limits, and
using these programs to meet your CRA goals.
U.S.
Small Business Administration presented on the benefits of using the 7(a)
Guaranty Loan. This program allows for a lender to finance new
ventures or assist existing businesses in their community by providing extended
terms to help small business owners with their business operations and reducing
the lenders’ loan risk.
Watch the newsletter for additional sessions taking place in 2019.
Comparison of the Rural Development B&I and REAP Programs with the SBA 7(a) and 504 Programs
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Who – USDA Rural
Development and an eligible lender.
What – Provide lender a loan
guarantee for business or commercial term loans. The guarantee
percentage is based on the loan amount and is as follows:
- $5,000,000 or less – 80% guarantee except in certain
situations can be up to 90%.
- $5,000,000 to $10,000,000 – 70% guarantee.
- $10,000,000 to $25,000,000 – 60%
guarantee.
When – Applications are
accepted year-round.
Where – The borrower must be
located in an eligible rural area. Click HERE for the rural
eligibility mapping site. The lender can be located anywhere.
How - Contact Dana Kleinsasser at dana.kleinsasser@sd.usda.gov or call 605-352-1142 to
discuss your next loan request.
In Fiscal Year 2018,
extra points and priorities were given to projects that fall in these
categories. We foresee the same for Fiscal Year 2019 (all other projects remain eligible, but those listed below have
priority):
- Projects that support and create reliable and
affordable high-speed internet connectivity through financing equipment
such as distance learning and telemedicine, and health information
technology, as well as internal and external wiring and publicly available
wi-fi capability.
- Projects that support and manufacture commercially
available unmanned technologies.
- Projects that support and increase agriculture,
forestry, food production, innovative farm technology, agritourism,
biotechnology and sustainable forest management. Examples include: grocery
stores, distributors, value-chain actors, and educational/training
facilities.
- Projects that advance energy security by boosting
production of energy from natural gas, oil, coal, nuclear, and/or
renewables.
- Projects that increase “Made in America” outputs in
agriculture, manufacturing, forestry, and mining. Projects can include
infrastructure, distribution, and value-chain participants.
- Projects that advance the quality of life via modern
utilities, efficient transportation, access to medical services, including
those for the treatment of and recovery from opioid addiction, and
improved safety and education.
Projects that advance
career training and development, including apprenticeship opportunities, to
provide rural communities, organizations, and businesses a skilled workforce
such as technical colleges, business incubators, and vocational technical
schools.
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USDA Rural Development is seeking applications for loan guarantees and grants for renewable energy systems and energy efficiency improvement projects.
These loan guarantees and grants are part of USDA’s Rural
Energy for America Program (REAP), which was created under the 2008 Farm Bill
and reauthorized under the 2014 Farm Bill.
This notice seeks applications for Fiscal Year 2019
funding. The deadlines to apply for
grants are October 31, 2018, and April 1, 2019.
Applications for loan guarantees are accepted year-round.
REAP helps agricultural producers and rural small businesses
reduce energy costs and consumption by purchasing and installing renewable
energy systems and making energy efficiency improvements in their operations.
Eligible systems include:
- Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels)
- Geothermal for electric generation or direct use
- Hydropower below 30 megawatts
- Hydrogen
- Small and large wind generation
- Small and large solar generation
- Ocean (tidal, current, thermal) generation.
Funds may also be used for the purchase, installation and construction of energy efficiency improvements, such as:
- High efficiency heating, ventilation and air conditioning systems (HVAC)
- Insulation
- Lighting
- Cooling or refrigeration units
- Doors and windows
- Electric, solar or gravity pumps for sprinkler pivots
- Switching from a diesel to electric irrigation motor
- Replacement of energy-inefficient equipment
Additional information about the program and how to apply
for this funding is available on page
40216 of the August 14, 2018 Federal Register.
- Program Goal: To assist agricultural producers and small businesses in communities of up to 50,000 residents reduce energy costs and consumption by purchasing and installing renewable energy systems and making energy efficiency improvements in their operations.
- Program Link
Highlighted Project - #1 Selling Car Crusher on the Market Benefits from Making Energy Efficiency Improvements
 OVB Holdings, LLC dba Overbuilt, based in Huron, SD, manufactures heavy machinery, including car crushers and balers/loggers. Overbuilt and its products have been around since 1996. They produce top-quality, high-performance equipment for auto salvage yards and scrap metal recyclers. In fact, they are the number one selling car crusher on the market.
Overbuilt obtained $22,882 in grant funding through USDA’s Rural Development’s Rural Energy for America Program to purchase and install LED lighting in the manufacturer’s building. The project included replacing 90 lights, including in the break room, entrance areas, offices, and the warehouse.
Matt Moeding, President of OVB Holdings, LLC, said, “It was a no brainer for me to move forward with making energy efficient improvements to the business. The old warehouse lights used to take 20 minutes to warm-up before reaching full brightness. The new lights are three times brighter and do not project a large amount of heat, providing overall energy savings.”
The federal funds were leveraged with a $65,000 private/commercial commitment and a $3,649 applicant contribution. The total project cost was $91,531.
This project will realize $24,669 per year in savings and will save 439,859 kWh of electricity per year (83.09%), which is enough electricity to power 40 homes.
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USDA is accepting applications for funding under the
Biorefinery, Renewable Chemical, and Broadband Product Manufacturing Assistance
Program.
The purpose of the program is to provide guaranteed loans to
fund the development, construction, and retrofitting of commercial scale
biorefineries using eligible technology and biobased product manufacturing
facilities that convert renewable chemicals and other biobased outputs of biorefineries
into end-user products, on a commercial scale.
The program’s objectives and outcomes are to:
- Create jobs and enhance the economic development
of the rural economy;
- Diversify markets for agricultural and forestry
products and agriculture waste material;
- Increase the energy independence of the United
States; and
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Promote resource conservation, public health, and
the environment. For FY 2018, USDA is announcing two separate
application cycles with the following due dates and times:
- October 1, 2018 (Due by 4:30 p.m. Eastern
Daylight Time)
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April 1, 2019 (Due by 4:30 p.m. Eastern Daylight
Time)
Applications received after the first deadline will be considered
for the subsequent application cycle, provided that funding is still available. For more information on how to apply, see page
38119 of the August 3, 2018 Federal Register.
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 Click the map to view contact information.
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The South Dakota Rural
Development Business and Cooperative Services team is excited to share our
quarterly RBS newsletter.
At Rural Development, we
appreciate our partnerships and all the hard work put in to make Rural South
Dakota the best it can be. We know that in working together, we can make an
even bigger impact on our communities, so we are pleased to improve the
communication to our partners through our newsletters. We plan to send a
newsletter each quarter to our partners to keep you in the loop with our
programs, tips, regulations, deadlines, etc.
If you have any
questions, requests or materials you would like to share in our quarterly
newsletter, please contact Dana Kleinsasser
at 605-352-1142.
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