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North Dakota Opportunity Fund helps local business

If not for the loan help they received, finances would have been tight while Steven Nardello got his pizza parlor running and it would have taken Ray Bergquist longer to raise the money to open his men’s clothing store.

Approaching one year of operation, the $9.7 million North Dakota Opportunity Fund revolving loan program has helped 21 businesses in 38 communities across the state get started or expand since its inception, said Brent Ekstrom of the Lewis & Clark Regional Development Council, which oversees the fund.

Ekstrom said the program started taking applications last November and made its first loan at the end of December. The program has loaned $6.2 million, 64 percent of its available funds to date. Ten of the loans are in repayment and one has been paid off. Loan amounts have ranged from $8,000 to $1 million.

Mandan led the creation of the fund in 2012 and so far City Administrator Jim Neubauer said “things are going very well,” providing the alternative funding source the city was hoping for its citizens and those in other communities.

In addition to Nardello’s Pizza and Bergquist’s Annex 208, the fund also has helped Right on Broadway shoe store get started, Lucky Ducks Deli expand and the new owners of Red Trail Petroleum in Mandan purchase the business. It also will help a new hotel open in Bismarck, as well as get a new architecture firm started.

Nardello said his pizza parlor has been open for four months. He employs 24 workers part time and is always busy. The loan covered the cost of renovating the space and buying furniture and equipment.

“It gave us a little bit of a boost for opening costs,” he said.

The loan also gave Nardello’s confidence in the business venture a boost because the program was so willing to get behind his idea. He said he found out about the program through his banker and that it was quick and easy to apply.

Bergquist said his sister-in-law and banker both told him about the fund. He passed the word on to Michelle Kaufman, owner of Hey Ocean, and she used it to help get Right on Broadway, her second downtown Bismarck business concept, running.

“It brought a lot more money to the table,” Bergquist said, who added the loan helped him buy clothing to stock his store and pay for the remodelling.

Most of the loans given out by the program have been to Bismarck-Mandan, businesses like Nardello’s and Annex 208, because of the development council’s presence in the community, Ekstrom said.

Loans in Williston and Dickinson are starting to pick up, Ekstrom said. There also have been loans in smaller towns, like a loan to a Beulah business to purchase a helicopter for chemical spraying weeds, a loan to purchase a restaurant in Beach and a loan to buy down the interest rate for a sandblasting business in Heil.

Ekstrom said many banks require 30 percent equity before making a loan, which is a big barrier for people wanting to start or expand a business. If a business owner is able to raise at least 10 percent of the equity, the fund helps by stepping in to pay the remaining amount of equity needed. Interest rates also are made lower, averaging between 5 percent and 6 percent.

“It gives them a better chance for success,” Ekstrom said.

The Opportunity Fund, which was started with a U.S. Department of the Treasury grant, is not only helping businesses. It’s also helping communities fill gaps in services, like a plumbing and heating company that the fund helped open in Dickinson and a convenience store it helped open in Williston. Expanded businesses also raise property tax values, Ekstrom said.

Although the state is not in “job creation mode,” Ekstrom said the fund also helps by bringing in higher paying positions in manufacturing or architecture in addition to service sector jobs. The loans given out have resulted in 348 new or retained jobs and a total investment by businesses of $45.9 million statewide.

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