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South Dakota is a Great Plains state that offers several advantages for business growth. Though it lacks the “flashy” profile of states such as California, New York, Texas or Florida, it still has plenty to offer to anyone who wants to strike out and make their mark in terms of business creation and growth. First of all, South Dakota’s low tax environment is hard to beat. Moreso, the South Dakota political culture is such that low taxes and pro-business sentiment is bound to endure for the long-term. The state, in accordance with the Federal government, offers several business incentive and assistance programs. BankWest and First Dakota National Bank are some of the institutions that provide borrowers with flexible and reasonable loans throughout the state. For a handle on loan size, the average SBA-guaranteed loan in South Dakota is about $289,200. This puts the state 24th in terms of average loan size in the country. However, given that South Dakota is a low-population and low-cost state, this kind of money goes much further in terms of business development than would a similar amount in high-cost locales such as Illinois or the nation’s coastal areas.

Tax Environment

The South Dakota business environment is one of very few in the nation that has no income tax, no business tax, and is generally easy on taxes across the board. This helps make the case for business growth and entrepreneurship because the larger amount of money pocketed by consumers could translate into greater revenues and growth for a savvy entrepreneur. Locating in South Dakota offers a uniqe opportunity to legally avoid a substantial tax burden. This translates into a stronger case when applying to loans, as lenders want to look at expenses as much as sales prospects.


A special aspect of the South Dakota business environment is its USDA-sponsored Rural Economic Development Loan and Grant Program. This program helps to spread business growth and employment throughout the state. South Dakota is a primarily rural state; urban centers concentrate wealth and opportunity in their immediate environs, typically leaving vast swathes of territory with a shortfall of investment and growth. This program aims to counter that trend by giving preferential treatment, including zero-percent interest loans and deferred payment plans to cover costs of vocational education programs to rural residence, general business expansion, technical assistance, and other costs associated with entrepreneural growth in rural South Dakota.


South Dakota is located in the center of the country, which allows for relatively easy access to all parts of the country. Given the nature of the U.S. population distribution, most national customers will be east of South Dakota. However, rural customers in the Midwest and Mountain states will be accessible with relative ease, giving South Dakota-based business an edge in customer satisfaction and speedy product delivery.


South Dakota is a rural state that has incentives for general business development with an emphasis on initiatives that stimulate rural economic growth and local employment. Entrepreneurs with a background in farming, rural business practices and consumer culture stand a good chance of succeeding in South Dakota. The favorable business environment and low taxes augment South Dakota’s appeal as a center for entrepreneurship. Lastly, the state’s location makes ventures with a heavy reliance on transportation and logistics throughout the contiguous U.S. a natural fit.