• Oct 22, 21
• spencergregory
• Revolving Loan Fund Directory
• 0 comment

The Commercial Bank Participation Loan Program is generally €œmarket driven€ in terms of the rates, terms and conditions offered to a borrower.

In most instances, BND’s participation under this program is needed to assist a financial institution with a borrower whose financing needs have outgrown the legal lending or exposures limits of the originating lender.

The total loans and extensions outstanding at any one time to a single borrower may not exceed 15% of BND’s total capital.

All loans are reviewed in accordance with BND’s lending policies and sound banking practices including, but not limited to, the intended purpose of the loan, the ability to repay, the business and its management, and the feasibility of the project.

Qualifying Requirements for Use of Proceeds – BND will consider a broad range of loan applications.

Desirable loans include, but are not limited to, the following: – Business and industrial acquisitions – Construction, conversion, expansion, repair and modernization – Purchase of land, buildings and equipment and the repair and modernization of the equipment – Start-up and working capital – Refinancing an existing loan – For any other reasonable business purpose – Equity – Specific equity requirements have not been established.

Each loan is reviewed on its own merits.

The amount of equity required is evaluated along with all other elements of the business.

Collateral – Adequate collateral is generally required to protect the interest of BND.

The collateral must be of such a nature that repayment of a loan is reasonably assured.

Examples of acceptable collateral may include: – Accounts receivable and inventory for short-term loans – Equipment which have an established market – Securities issued by the federal government or its agencies – Letters of credit from acceptable financial institutions – A first mortgage on commercial real property Interest Rate The interest rate on BND’s participation percentage is set in accordance with either the loan policies for the program or the current market rate for similar loans.

Such factors as risk, liquidity of collateral, equity position, repayment and the term of the loan are taken into consideration.

Repayment Terms BND places primary emphasis upon a borrower’s ability to repay a loan rather than upon the collateral pledged as security.

BND participates in a loan only when a specific source of repayment can be identified and agreed upon by all parties.

Such a source must reasonably assure repayment.

The repayment terms assigned to these loans vary depending upon the use of the proceeds as well as the overall nature of the business.

The following maturities can be used as a general guideline for the term of loans: – Real Estate – 12 to 20 years – Equipment – 5 to 7 years – Working Capital – 3 to 5 years



Contact Information
Bank of North Dakota
Address: 1200 Memorial Hwy
City: Bismarck
State: North Dakota

Website: http://banknd.nd.gov/lending_services/business_financing_programs/commercial_bank_participation_loan_program.html

• Share :