Briselda Hernandez

A screening committee is recommending $250,000 from Minot’s MAGIC Fund be used to continue supporting a revolving loan fund administered by Souris Basin Planning Council.

The $250,000, if approved by the Minot City Council, would add to the $2.58 million invested from the MAGIC Fund since 2019 into the Business Accelerator Fund (BAF). The BAF is used to provide local matches needed by businesses to receive interest buydowns through the state’s PACE and Flex PACE programs.

SBPC estimates a $250,000 MAGIC Fund investment will leverage $3.5 million in other project funds the first time the revolving loan fund lends the money. That includes $465,000 in Bank of North Dakota PACE or Flex PACE interest buydowns.

To have adequate reserves to meet anticipated business requests, BAF will need future funds of $1.05 million over the next three years, SBPC Executive Director Briselda Hernandez said. Under MAGIC Fund guidelines, BAF is limited to 25% of the amount set aside in the MAGIC Fund for matching grant programs. The city council budgeted the maximum of $1 million for 2025, enabling SBPC to request $250,000.

Hernandez said the number of requests to BAF has been consistent in recent years, with 14 applications last year.

“This year we already have several projects in these first two months that we’ve identified are in the pipeline, so we don’t expect that to decrease – if anything, continue to increase,” she said.

Looking at projections, the conservative estimate is BAF will need to have $750,000 available to loan each year.

“That’s what we think we need – at least – available every year to meet the basic demands,” Hernandez said.

Hernandez said BAF has assisted 62 new and expanding businesses since its inception in 2019. The $2.6 million invested through BAF during that time reflects the use of a small amount of funds from sources other than the MAGIC Fund to meet business demand, she said.

Businesses have invested from their own resources or bank financing more than $75 million into projects aided by BAF, she said. About $4.85 million has been leveraged in interest buydowns from state programs due to the fund.

Although BAF serves SBPC’s seven county region, the majority of the businesses using the program have been located in Minot.

Because the intent is for the revolving fund to begin feeding itself as loans are repaid, the BAF committee intends to eventually discontinue requests to the MAGIC Fund. With that in mind, the BAF committee has made adjustments, including shortening interest buydown periods to three years to stretch the dollars, Hernandez said.

“That’s still a big benefit for a lot of our businesses, and we’re also making sure that if there are other sources of funds, if there’s flexibility somewhere, we try to, again, leverage other funds to help meet those needs. But we’re trying to stay on top of those needs,” she said.