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Growth Fund committee modifies accelerate loans, extends deadlines for startup Thread and eases repayment for SafetySpec
Summary
The committee approved a set of accelerate-program actions: an extension tied to Thread's Series B financing, a 12-month amortization in place of a balloon for SafetySpec, declared default and collection actions for Taylor Ree, and a restructured repayment plan for Integrity Fundraisers.
The Grand Forks Growth Fund Committee approved several actions under its high-risk "Accelerate" and CARES Act-supported loan programs, moving to give time for two startups to finish financing rounds, restructuring repayment for one company and beginning collection steps for a defaulted borrower.
The committee voted to amend the maturity schedule for Thread (a local tech start-up) to allow the company's Series B round to close. Under staff and Bank of North Dakota (BND) recommendations, the committee approved moving the loan’s maturity from July to a later date and increasing the printed interest rate for calculation to prime (7.5%) while preserving the company’s 2% payments during the interim; the interest differential would be capitalized into the balloon payment. Committee members later asked staff to shorten the revised maturity to a February date (ahead of an April BND date) to balance runway for the company and oversight by the committee; the group approved that shorter date.
Josh Reedy (represented at the meeting by Josh Hague) told the committee Thread expects to conclude Series B late in the year and is targeting a roughly $25 million round. “We have already initiated series B … we expect by the end of the year, Q3, Q4, for the conclusion of that and expecting around a $25,000,000 raise,” Mr. Hague said.
SafetySpec — which has an accelerate loan coming due in July — won committee approval to convert its single balloon payment into 12 equal monthly payments at the 6% rate. Company founder Ken Barton described recent commercial progress, federal contract wins and a pending larger award that would add revenue to support repayment; he said the firm planned to pay the city loan early if capital raised closes as expected.
The committee declared Taylor Ree in default after the firm notified staff it was ceasing business operations. Staff recommended and the committee authorized collection steps and evaluations of any assets, noting BND was reviewing its position as well.
Integrity Fundraisers, a CARES Act EDA-RLF borrower, won a restructuring that moves short-term payments into a manageable schedule and leaves a balloon at the end of a three-year term to allow the firm time to rebuild sales; staff highlighted the company’s ongoing communication with staff and its work with the SBDC.
Why it matters: The accelerate program takes more portfolio risk than traditional lending in order to keep high-growth local companies on regional payrolls. The committee’s actions reflect a mix of tolerance for time-limited risk (to let private financing close) and conservatism (securing repayment or beginning collections where operations stop).
Next steps: Staff will coordinate documentation with the Bank of North Dakota, record new loan security where required, and return updates on progress and any collections activity at future committee meetings.
