All the money has been loaned out from a state fund that was created to help businesses get through the pandemic, and Gov. Kristi Noem said the state probably can’t replenish the fund.
It was about a month ago when the Legislature approved Noem’s plan to create the Small Business Relief Fund. The $10.5 million for the new fund was pulled from four of the state’s pre-existing economic development funds.
All of that money is now in the hands of small businesses.
“We’ve looked at possibly putting more resources in that fund,” Noem said Tuesday. “It would have to be dollars outside of the state of South Dakota.”
Noem said she’s seeking guidance from the Treasury Department and Congress on the possibility of replenishing the fund with federal money. She said the state isn’t likely to put more of its own money in the fund.
“I think in light of what we’re seeing with revenue numbers coming in, knowing that we’re going to see some pretty significant impacts coming in reports that will come forward in June and July, we’re not sure that we have state dollars that we could put into that fund at this time,” Noem said.
Two hundred businesses across the state received loans from the program. The amounts range from $5,000 to $75,000. Loan terms are up to 60 months with no payments for the first six months. The loans are interest- free.
One of the loan recipients was Builders Solutions, a lumberyard and contract builder in Miller. Owner Don Nye said it took less than two weeks to receive money after he applied.
"Besides all the paperwork you have to do for the government, it really wasn't a bad process," Nye said. "The people in charge of it were very helpful."
The program was open to small businesses with fewer than 250 employees. Recipients included hotels, salons, auto mechanics, restaurants and many other types of businesses, but no nonprofits. The Governor’s Office of Economic Development said the exclusion of nonprofits aligns with its typical policies, which allow nonprofit participation only for entities such as economic development corporations.
South Dakota businesses and nonprofits have also gotten help from other sources, including the federal Paycheck Protection Program, which has made about $1.6 billion in loans to 19,159 recipients in the state through a first and second round of funding. Those loans are forgivable if spent primarily to keep or rehire employees.