Connecting Ideas to Capital: Business Incubator Thrives
It’s been said that “if you build it, they will come,” but the Research Park at South Dakota State University in Brookings, South Dakota, has spun a new narrative due to the success of its business incubator program: “Because we can build it, they’ll come, and they’ll keep coming.”
As a Community Investment Fund loan borrower from Dakota Resources’ Community Development Loan program, the Research Park was able to utilize the flexible loan terms and affordable rates to equip and support businesses to grow and conduct game-changing research right here in South Dakota. In fact, the Research Park was able to recruit one company from Minnesota to relocate to South Dakota because of the flexibility offered through the financing with Dakota Resources.
“I was familiar with Dakota Resources from about 15 years ago, when I was working in economic development in Madison, SD,” said CEO and Executive Director of the Research Park, Dwaine Chapel. “I knew how the funding worked, how flexible it was and the wide variety of things that we could use the money for. We’ve used funding from Dakota Resources both for renovations, new tenant buildout, and for larger design projects, including a new 45,000-square-foot facility.”
Photo Credit: Research Park
Since their initial Community Development Loan, the Research Park also utilized approximately $50,000 to build out custom lab spaces for two South Dakota-based companies, Raven Industries and POET. These two businesses have since created permanent jobs and student internships to support their respective research endeavors.
“One of the great successes of our use of the funding has been in recruiting Raven Industries and POET to the Research Park,” Chapel said. “Both of these companies now employ approximately 9 people, including seven students in either internships or part-time work capacities. They were able to have access to the talent on campus, which is great for the companies and great for the students.”
In addition, a supplemental $100,000 in financing from Dakota Resources is being utilized as working capital in support of a larger project: developing a design for a new, 45,000-square-foot pilot plant that will employ both faculty and private industry researchers. Construction is set to begin this year.
“Without these funds as seed money to initiate the process, we would not have had success in securing that facility,” Chapel said. “Because the repayment plan is flexible and the interest rates are low, I encourage any non-profit like us to pursue funding through Dakota Resources. We’ve financed projects this way since 2013, and we anticipate asking for additional funds in the future, because going out to the commercial loan market as a non-profit is challenging. This funding model opens up cash flow and keeps our organization going.”
Photo Credit: Research Park
By providing built-to-suit workspaces and high-level assistance for some of the private sector’s most ambitious research initiatives and special products, the Research Park continues to make a name for itself, and, by extension, for the 45 different businesses within its physical and virtual space.
Take Action: Do you have a project in your community you have been wanting to start? Dakota Resources is here to connect capacity and capital to empower rural communities, and our Community Development loans are integral to fulfilling that mission. To inquire about our lending program, reach out to us via phone at (605) 978-2804 or contact us via email at [email protected].