COVID Relief Programs
Bank of North Dakota (BND) played an important role assisting financial institutions in distributing funds to businesses during the pandemic. It utilized its network of banks and credit unions across the state who were able to ensure the delivery of funds happened as quickly and efficiently as possible.
In the initial days of the pandemic, BND hosted weekly webinars that allowed the state’s congressional delegation and Small Business Administration to share the details on the federal Payroll Protection Program. There were up to 800 lenders and economic developers participating in these webinars. As a state, North Dakota had among the highest per capita loan distribution with 100 lenders distributing 19,792 PPP loans for $1,749,683,631.
Four programs administered by BND addressed the needs of various business sectors in the state. Applications were accepted through November 30, 2020. Through them, businesses in 399 sectors accessed funds by working through their local lender. The role local lenders played in the economic recovery was significant and they deserve our appreciation.
1. Ethanol Recovery Loan Program
This program was created to provide low interest loans to support the economic recovery of North Dakota ethanol producers. Loan funds were used to support working capital needs of North Dakota-based operations at a 1% fixed interest rate.
There were four applications loans for a total of $21.5 million received.
2. Small Employer Loan Fund (SELF)
SELF assisted local financial institutions and certified development corporations in providing loans to North Dakota businesses with 10 or less full-time equivalent employees to aid in their recovery from pandemic-related impacts. The proceeds of the loan, which had a fixed interest rate of 1%, could be used to support working capital needs, recurring expenses and replenish inventory.
There were 910 applications for $30.8 million in SELF loans.
3. COVID-PACE Recovery I Loan Program (CPR I)
CPR I allowed local financial institutions to provide low interest loans for businesses in North Dakota to support working capital needs, term out COVID-related bridge loans and credit card debt originated on or after March 13, 2020.
There were 277 applications for $377 million which utilized $35 million in CARES Act funds to buy down the interest rate to 1%.
4. COVID-PACE Recovery II Program
CPR II allowed businesses in North Dakota to receive funds to reduce interest expense accrued on eligible existing debt for up to a ten-month period and not need to be repaid. Applicants worked with their local financial institutions to apply.
CPR II received nearly $35 million in applications to benefit 800 businesses.
5. Student Loan Deferrals
In addition to the disaster relief programs for businesses, six-month student loan payment deferrals were given to 8,899 borrowers, about 34% of the student loan portfolio in repayment. Loan deferrals were also granted to 241 commercial borrowers and 143 residential loan borrowers.
Agriculture Disaster Relief Programs
2021 Drought
The 2021 drought created hay shortages, forcing producers to purchase and transport hay from other states. A statewide drought disaster was declared. The Livestock Rebuilders Loan Program was part of a suite of programs rolled out by the state including the Emergency Feed Transportation Assistance Program administered by the ND Department of Agriculture and the Livestock Drought Loan Program administered by BND.
The Livestock Drought Loan Program covered ag-related costs that included production or purchase of feed; transportation of feed or livestock; obtaining water for livestock to include drilling a well, piping or hauling; forage and seed costs; cover crops; silaging costs and insecticide costs. Loans were made for up to a five-year term at a fixed interest rate of 3.50%. Applications were accepted through June 30, 2022.
Approximately 16,000 head of cattle were replenished in the state with the assistance of the Livestock Rebuilders Loan Program in 2022 and 2023. It was established to strengthen the livestock industry after the 2021 drought when beef cow numbers decreased by 89,000 head.
Local banks and credit unions serve as the loan program conduit for BND programs. For this effort, 32 different financial institutions, and a total of 58 branches within them, accessed the program for their customers. There were 196 loans made for a total loan amount of $26,650,860, of which BND funded $18,549,013.
