Business loan program advances in Legislature

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PIERRE — State government would open a new financing program that would help South Dakota businesses needing loans for working capital, under a measure passed Monday by the state Senate.

The money would originate from the federal government. South Dakota is due to receive a total of $13 million of federal aid over three years.

The money can be used to partner with banks on businesses’ financing, said Sen. Tom Nelson, R-Lead.

The program would be administered by the Governor’s Office of Economic Development. But it wouldn’t require any additional state funding, according to Nelson.

Senators voted 29-6 in favor of the legislation.

The federal aid was appropriated by Congress as part of the Small Business Jobs Act of 2010.

Sen. Stan Adelstein, R-Rapid City, tried to amend the bill to add the safeguard of an additional loan-review committee. Nelson argued that it was unnecessary. The amendment failed 24-11.

Adelstein also attempted to limit the loans to a maximum of 20 percent of the book value or net worth of the borrower’s business. That amendment failed 24-11, too.

The legislation, Senate Bill 11, was introduced on behalf of the Daugaard administration. The bill now moves to the House of Representatives for action.

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