Value Added Sub Fund (VASF)

The purpose of the Value Added Sub Fund (VASF) is to make loans for agricultural development, feasibility studies, or marketing studies for new innovative agricultural development projects. The program assists with financing feasibility or business studies that will encourage or enhance agricultural development. Use of funds: feasibility or business studies for ag development technology. Terms: 0% interest; flexible repayment.

• Applicants proposing new, innovative agricultural development projects.

• Projects must develop or promote value-added agriculture in South Dakota, such as the production, use, or processing of an agricultural commodity, product, or by-product in the state.

• Applicants may request a loan for no more than 45 percent of total project costs for study expenses.

• Applicants must provide an equity contribution of at least 10 percent of total project costs for the marketing or feasibility study.

This is a loan, not a grant, and SDGOED publishes its headline terms as just two items: "0% Interest; Flexible Repayment." No repayment schedule, term length, origination fee, or collateral requirement is published, and no maximum or minimum loan amount in dollars is published anywhere on the program page.

Size is capped as a share of project cost rather than a dollar figure. The VASF application's evaluation criteria state: "An applicant may not apply for a loan for more than 45% of the total projects cost for study expenses."

Applicant equity requirement. "An applicant must provide an equity contribution of at least 10 percent of the total project costs for marketing or feasibility studies expenses."

What counts toward your match. "Matching funds may include cash spent, or in-kind services rendered, on behalf of this project by the applicant after board approval of the application" — note the timing: spending before board approval does not count.

Who decides, and on what. "only the REDI board may make an award from the program to an applicant." Because it is credit, the board weighs repayment capacity explicitly: "The capacity of the applicant to repay a loan if awarded, including the amount of the loan, the economic feasibility of the project or product; the ability of the applicant to service the debt from cash flow of operations, capital or collateral; the review of the financial status of the project, business plan, and applicant." It also considers "The terms and conditions of the loan, if awarded, and compatibility with the needs of the business of the fund," which means final terms are negotiated case by case rather than fixed.

What the money may fund. Feasibility or business studies for agricultural development technology — the loan finances the study, not construction or operations.

Complete the VASF Application (PDF, available from SDGOED). Contact the South Dakota Governor's Office of Economic Development.