The state's Revolving Economic Development and Initiative (REDI) Fund, a $40 million fund created by taxpayer initiative in 1987, is the subject of a report issued in early September by the Governor's Office of Economic Development.
The 79 companies with loans closed for more than one year have a total of 5,165 full-time and 320 part-time jobs, more than 2,200 of which are in towns with a population of less than 5,000. Also, six loans have gone into default during the fund's five-year history.
Over the past five years, payrolls of REDI Fund companies have increased from $53 million to nearly $172 million. "That is the most dramatic indicator of the REDI Fund's success," says Mark Schuler, REDI Fund and Economic Development Finance Authority coordinator.
REDI Fund loans have been distributed in 48 different communities, with communities under 15,000 receiving 50 percent of loan dollars.
While 56 percent of REDI Fund loans have gone to expanding South Dakota companies, 25 percent of loans have been made to lure companies into the state, and 19 percent of the loans have been granted to start-up companies.
One of the startup companies, Ultra Flex, a manufacturer of polyethylene plastic sheeting, began business in March 1992 in Madison. The company, founded by four South Dakotans, has eight employees but projects to have 27 within three years of the loan closing. Company president Gary Scofield says the REDI Fund loan "was the key part of the entire package," which included a bank loan, some city financing and an equity contribution from the company.
—Kathy Cobb
