Rural Electric Economic Development, Inc. (REED Fund) is a high performing rural CDFI with a strong record of growth, management and rural impact. Since 1996, REED fund has grown to become a regional leader in gap financing for business while maintaining strong support for community development. REED is committed to meeting growing capital needs in a 36,000 square mile region by leveraging both capital and partnerships to maximize impact on the region's economy.
The REED Fund makes loans to both for-profit and nonprofit entities. Consideration is given to the extent to which the proposed project provides opportunities to rural residents and/or communities through job creation/retention, capital investment, wealth-creation, and/or community improvement. Projects that add value to locally produced raw materials and projects that improve the quality of life in rural areas are considered a high priority.
REED's lending programs include:
- Community Development: Loans for projects that enhance community services and quality of life that is necessary for sustainable development, including healthcare, infrastructure, fire protection, education, arts and recreation programs. These loans are generally made to non-profit or public entities at very low interest.
- Business and Industry: Loans are available to support business start-ups, development, expansion and attraction, as well as for projects that stimulate self-employment, and lead to job creation and/or retention. Loans benefit the retail, service, tourism, manufacturing and technology sectors.
- Value-Added Agriculture: Loans in this market recognize the value-added impact of agriculture as a regional economic engine through expanded services, improved marketing, or further processing. Loans are not made for traditional production agriculture.
The Calvert Foundation investment provides essential lending capital to the REED Fund.
The REED Fund serves people and community projects in rural eastern South Dakota and western Minnesota. 15-20% of the borrowers' income is at or below 80% of the local median income. REED loans bring opportunity to people who might not otherwise be able to secure financing for growth, or obtain well-paying jobs. Thirty-eight percent of REED's loans are women owned or managed and 99% are in rural areas. Eighty-eight percent of REED's financing is issued in communities of less than 4,000 people or unincorporated rural areas, with 93% of loans benefiting projects that are locally owned and controlled.
REED's activities expand capacity and create a foundation for future development that positively impact local economies and quality of life. REED's loans have produced such positive results as increases in business development, expansion, and job creation and retention in a rural region with an increasing focus on economic sustainability. REED has provided 72 community loans, 86 business/micro loans, and 38 agriculture loans, assisting a total of over 6,000 jobs and a leveraged total project investment of $315 million. Sixty-one percent of borrowers have less than 20 employees, 34% of loans are to start-up businesses and 38% are women-owned or controlled.
When the owners of True Value Hardware decided it was time to sell the business and retire, they feared nobody else would risk owning a retail business in a small town of merely 975 people. However, the interested Mark Cook approached REED fund, which lent $73,300 towards the total cost of $245,000 to purchase and modernize the business. By financing this project, the REED Fund has demonstrated its deep commitment to small, rural communities. Full Story