INCENTIVES & FINANCING
Opportunities for Funding
South Dakota’s REDI (Revolving Economic Development and Initiative) Fund is South Dakota’s flagship financing tool. It is available to start-up firms, businesses that are expanding or relocating in South Dakota, as well as local economic development corporations.
HOW IT WORKS
The REDI Fund provides financial assistance up to 45 percent of a project’s total cost financing for the purchase of land and associated site improvements, construction, acquisition, and renovations of buildings. It also can be used to help cover fees, services and other costs associated with construction.
Companies should secure matching funds and be able to provide a 10% minimum equity contribution before applying to the Board of Economic Development for a REDI Fund Loan.
- Currently set at 2% interest
- Amortized over useful life of asset
- Five-year balloon payment
The South Dakota MicroLOAN Program is a partnership with the Board of Economic Development, South Dakota Development Corporation, and Governor’s Office of Economic Development. These loans are made available to small businesses within the borders of South Dakota and South Dakota residents–including main street and retail operations–for working capital, equipment, real estate or other fixed-asset project costs.
- Small Business Loans
- Maximum of $100,000
- 3% Interest
The SBA 504 Loan program was designed to foster economic growth by making affordable financing available for small businesses.
Through FDDC, loans are extended for terms of 10, 20 and 25 years at fixed, below-market interest rates to South Dakota businesses adding full time positions in the state. Loans are also available for businesses meeting public policy goals which include rural development, woman, minority or veteran ownership, expansion of exports, energy efficiency, labor surplus area or business district revitalization.
- Long-term, fixed-rate financing
- Available to for-profit businesses
- Subordinated to first mortgage lenders
Codington County offers a five-year discretionary property tax on any new commercial or industrial construction over $30,000 as follows:
- 1st Year: 0% of the assessed property value
- 2nd Year: 0% of the assessed property value
- 3rd Year: 0% of the assessed property value
- 4th Year: 0% of the assessed property value
- 5th Year: 0% of the assessed property value
The discretionary formula does not apply to existing buildings. The discretionary formula is applied in the first year following completion of the facility.
Watertown, South Dakota, has the best tax incentives any business can ask for:
- No corporate income tax
- No personal income tax
- No personal property tax
- No business inventory tax
- No inheritance tax