Beadle and Spink Enterprise Community (BASEC) just made its 500th loan and through its revolving loan program has loaned over $16 million dollars to improve the economic and housing climate of part of South Dakota since 1996. BASEC (named after the two counties it serves) has less than a 1 percent default rate and has made loans to all income levels with the majority being low to moderate income applicants. Some of the borrowers have had excellent credit histories and some not so good. Executive Director Lori Hintz feels the key to the low default rate besides the fact that great people live in the service area, is that when times get tough, they try to work out a plan that works for them, their cash flow and their situation.
Of course not all of the businesses have been successful but the interesting thing is that even if the business doors closed; the owners still continued to pay off their loan. This is a testament to the hardworking ethical people that live in the community.
In addition, to the loan programs, BASEC is committed to providing technical assistance to the service area. Grants have been written for community projects, meetings have been facilitated, many events have been sponsored and hosted through the years. They have tried hard to bring an awareness of new opportunities and resources available. Encouraging leadership and volunteerism at all age levels has also been a core principal of BASEC.
From the initial community grassroots meetings following the receipt of start-up government funding through USDA in the 1990’s, there was a sense that they needed to make the most out of this once in a lifetime opportunity and that becoming a self-sustainable organization was of high priority, thus the revolving loan fund (RLF) concept came about. They did not want to take the place of banks and lending institutions but there certainly was the need to provide increased incentives for improvements, expansions and community development. For many of the towns in the service area, there had not been a new home built in 20 years. With that said, BASEC worked with the area banking representatives and other resource funding agencies to develop revolving loan programs (RLFs).
The RLF was diversified in to 4 major areas and those areas are continued today:
- Affordable and safe housing
- Business retention and development
- Rural development
- Farm income development with a primary focus on livestock purchases
The RLF was developed in a way that BASEC could become a self-sustaining organization for far longer than the 10 year initiative. In 1998, BASEC’s loan fund became self-sufficient and all administrative costs were funded by using the interest rate returns from the loans made. The principal portion of the funds that are repaid are put directly back into the revolving loan program and are reloaned.
According to Executive Director Lori Hintz, the last 16 years have been both challenging and rewarding at times. Finding solutions to funding outdated infrastructure such as roads, bridges, water and sewer lines, increasing job opportunities, keeping businesses, keeping schools, improving housing choices, and just improving the way of life in rural South Dakota keeps them working hard. BASEC is an organization that should be around for many years. It is one of the very few Enterprise Communities in the nation that achieved self-sustainability and continues to this day.
USDA Rural Development provides loan funds to organizations for re-lending. To find out more about the Rural Economic Development Loan and Grant Program, click here. To find out about the Intermediary Relending Program click here. For information about the Rural Microentrepreneur Assistance Program click here or contact any Rural Development State Office.