The vast majority of North Dakota recipients have received small loans under $ 150,000, but more than 2,000 companies have accepted larger sums, as the US Small Business Administration report released this week reveals.
Of the North Dakota companies that qualified for the highest tranche of loans, 294 companies accepted loans over $ 1 million, and a small group of 14 companies took the maximum loans available from 5 to $ 10 million.
Many of the beneficiaries are businesses familiar to North Dakotas. Local favorites include Sickies Garage, Theodore Roosevelt Medora Foundation, Cass and Clay Counties YMCA, as well as some of the state’s busiest casinos including the Four Bears Casino, Sky Dancer Resort, and Prairie Knights. Casino.
The SBA List is the most comprehensive disclosure of companies that have benefited from the Government’s Nationwide Paycheck Protection Program, the federal aid program designed to support small businesses during the pandemic to avoid harm. layoffs in times of recession. PPP financing is touted as a federal loan program for sole proprietorships, but companies that comply with loose conditions attached to the financing will not have to repay the government, effectively turning the loans into grants.
The PPP disclosures reveal a cross section of the North Dakota economy, with loans reaching businesses in nearly every industry in the state. Oil companies, utility providers and real estate agencies were among the most common beneficiaries, as were restaurants, churches and health care providers.
Among the relatively small group of North Dakota businesses that accepted loans over $ 150,000, a majority took on smaller loans of less than $ 350,000. The federal government did not disclose the names of the approximately 17,500 small businesses that accepted the smallest tranche of loans.
Two companies linked to politicians that North Dakotas will find on their ballots in November have also benefited from the program. Kilbourne Group, the real estate development company founded by Governor Doug Burgum, accepted one of the loans of $ 350,000 to $ 1 million. And the Killdeer Veterinary Clinic, the Dickinson veterinary clinic owned by Shelley Lenz, challenger to the post of Democratic governor of Burgum, accepted a loan of $ 150,000 to $ 350,000. Kilbourne Group said its loan kept 23 jobs, while the Killdeer Veterinary Clinic said it was able to maintain 18 jobs.
Many of North Dakota’s colleges and university foundations were also among the state’s top recipients. Trinity Bible College took a loan of $ 350,000 to $ 1 million, the University of Jamestown took $ 2 million to $ 5 million, and the University of North Dakota Aerospace Foundation received a loan of $ 1 to $ 2 million. Another high-profile inclusion, the North Dakota State University Foundation, the philanthropic arm of NDSU, accepted one of the $ 350,000 to $ 1 million loans, saying the loan kept them 43 jobs.
Businesses on Native American reserves were common beneficiaries. In addition to five reservation-based casinos, several tribal community colleges have taken out loans, including Sitting Bull College, Cankdeska Cikana Community College, Nueta Hidatsa Sahnish College, and Turtle Mountain Community College.
Five of the 14 North Dakota companies that received $ 5 million to $ 10 million in loans were from Grand Forks, the state’s manufacturing hub.
Most of these Grand Forks companies said federal intervention helped them keep hundreds of jobs. ACME Electric Motor said it managed to save 473 jobs, while Edgewood Opco and the Valley Senior Living retiree community both said they kept the maximum of 500 jobs.
Grand Forks-based Strata Corporation, Fargo-based Northern Improvement, and several other companies that have gone through Associated Bank as a lender have strangely stated that they haven’t kept any jobs with their loans. A spokesperson for Northern Improvement explained that the company had, in fact, used all of its loan for labor costs, and he attributed the oddity of the data to a potential bank error in its report to the SBA. A bank spokesperson did not respond to a request for comment in time for the post.
Oil companies in western North Dakota were among the top recipients of state loans. More than 170 companies in the field received more than $ 150,000, including Dickinson-based Wyoming Casing Service, which received at least $ 5 million. Almost 375 other Oil Patch companies received less than $ 150,000.
The state’s oil industry has been in turmoil as the pandemic aligns with a global oil price war between Russia and Saudi Arabia, but the SBA listing reports that the PPP program has helped North Dakota oil companies keep more than 7,000 jobs. Yet workers in the energy sector filed more jobless claims in May, the most recent month of data, than any other industry.
Another notable beneficiary was the Dickinson-based Fisher Group, taking one of the loans from $ 150,000 to $ 300,000. Fisher Group is partially owned and founded by Mike Fisher, former vice president of Fisher Sand & Gravel, which recently made headlines for winning contracts to build part of the US-Mexico border wall.
Companies must use at least 60% of loans to cover salary costs so that they turn into grants. However, there is little control over how companies spend funds, opening the door to abuse.
North Dakota companies have received an inordinate proportion of federal government PPP funding as a result of the wise operations of the Bank of North Dakota. A Washington Post Analysis earlier this year revealed that North Dakota received more P3 funding per worker from the private sector than any other state in the country, nearly $ 5,000 per capita.
The Bank of North Dakota, the country’s only state bank, trained small private bankers across the state on loan applications long before the PPP program rolled out, connecting them with representatives of the US Small Business Administration in a concerted effort to channel funding. in North Dakota.
The federal government has made nearly 5 million P3 loans to businesses across the country, totaling more than $ 521 billion and supporting more than 51 million jobs.
The rushed nature of the PPP loan program has generated some controversy in recent months. The imprecise wording of a massive coronavirus stimulus package known as the CARES Act meant that some large publicly traded companies managed to qualify for loans aimed at small businesses. And while the Trump administration has tried to collect these loans, companies are not required to return the money, and some have refused to give up their funds.