Published October 1, 1994 | October 1994 issue
After years of exporting one of its most valuable resourcesits educated youthSouth Dakota has begun an effort to keep them home. The state's Graduate Entrepreneur Loan Program (GELP) provides an opportunity for budding entrepreneurs, who are also recent South Dakota graduates, to start their own businesses.
The GELP program is an outgrowth of the state's Revolving Economic Development Initiative Fund (REDI), established in 1987 with $40 million, to provide loans to businesses that are primary job creators and that create a product or service which can be marketed outside South Dakota, bringing dollars into the state.
The GELP and REDI programs are part of a unified effort by the state of South Dakota, the state's universities and the business community to effect a healthier business climate.
While the GELP fund is part of the REDI fund, it is targeted to new businesses established by recent college or high school graduates. Any graduate of a South Dakota institution, three years out of college, or seven years from high school, is eligible to apply for a low-interest loan, to a maximum of $50,000, to open a new business.
The first GELP loan went to South Dakota School of Mines and Technology graduates Mike Strom and Julie Pettit, whose business, Precision Prototype, provides computer-aided design to companies. Precision Prototype is currently focusing on the jewelry industry, providing advanced manufacturing services to local jewelry manufacturers.
South Dakota is unique in its efforts to offer the expertise and technology of the state's six public institutions to the business community, according to Richard J. Gowen, president, South Dakota School of Mines and Technology. The institutions make their resourcesincluding technology, faculty and studentsavailable to the business community. As Gowen explains, it is a "win-win" situation: The students and faculty get to work through a real-life situation and businesses have additional resources at their fingertips, literally, if the business elects to use the High Plains Center for Technology, an on-line computer service.
Students' interest in becoming business owners can be attributed, in part, to this hands-on business experience they receive while still in school, Gowen says. Add to this the available funding through the GELP program and, according to Gowen, business ownership becomes more attainable.
Another desired result of these initiatives is to keep South Dakota graduates in the state. A recent survey of South Dakota School of Mines and Technology graduates showed that 60 percent would stay in South Dakota if the job opportunities were there. In the last five years, the joint efforts of the state's economic development office, businesses and the universities have paid dividends, officials say. Among the School of Mines and Technology graduates, 30 percent have remained in South Dakota, compared to only 9 percent a few years ago.
No time or dollar limits have been placed on the GELP program, according to Dave O'Hara, commissioner, South Dakota Office of Economic Development. As long as there are qualified applicants, he says, South Dakota will provide loans to entrepreneurial graduates.