Inside a long, low building on the outskirts of Aberdeen, South Dakota, tiny transformers slid down a Midcom assembly line on a late summer day in 1999.

Midcom, an aerospace manufacturer, wouldn’t have been there with 220 jobs for this largely agricultural area if it weren’t for 17 electric co-ops that came together four years earlier to found Rural Electric Economic Development, Inc. (REED) and capitalize a revolving fund.

Revolving fund money is lent out over and over again as it is paid back, reinvested in a continuous cycle to local businesses and the communities that support them.

REED, still in its formative years in 1999, had already provided more than $10 million for 50 projects in the eastern part of South Dakota and southwestern Minnesota. Today, those totals are $115 million over 383 projects, according to REED’s website.

Midcom’s plant was in the new business park built by Aberdeen Development Corp. with the help of a $400,000 REED loan. That was a key source of funding for the $2.2 million the corporation needed to provide the 160-acres plot with water, sewer and high-speed fiber optic telephone cable.

Dennis Hagny, general manager of Northern Electric Cooperative in nearby Bath, S.D., shepherded the loan. In fact, the development corporation wouldn’t have known about the revolving fund had it not been for Hagny.

“Without that $400,000, we wouldn’t be here,” James Barringer, executive vice president of the development corporation, said at the time. “We recognize that jobs creation is extremely important to Northern Electric.”

REED loans were usually part of package deals that included credit from banks and federal agencies like the Small Business Administration and the Department of Agriculture. This approach allowed REED to leverage more than $55 million in its first four years. That, in turn, led to the creation of 799 new jobs and the retention of another 1,297.

“It feels great. We’ve been able to make a real difference,” said Linda Salmonson, the administrator of the fund.

A difference no single co-op could make on its own.

“You don’t have to have people on your staff managing a $250,000 loan program. You’ve got access to an $11 million fund,” said Steve Ahles, then-general manager of Whetstone Valley Electric Co-op in Milbank, S.D., and chairman of REED’s board of directors.

Each REED loan application had to be approved by the local co-op’s board as well as REED’s board.

“We rate it on job creation, value to the community, value to agriculture, and whether it will build energy demand,” Ahles said.

Some of REED’s largest loans stayed within the ag/co-op family. One went to the South Dakota Wheat Growers to build a new high-speed terminal for loading railroad grain cars. Another, for $750,000, was part of the financing package for Heartland Grain Fuels’ new ethanol plant in Huron. S.D. The plant was Dakota Energy Cooperative’s biggest load.

Salmonsen had a stack of photos in her office she used to show visitors what other REED loans produced: a new wing on a hospital/nursing home, a convenience store, a bed and breakfast, a truck plaza, a livestock feed yard, a bait shop, a wood mill and a community center.

“So much of the story of the REED program is loans for some of these smaller businesses and communities,” she said.

The hospital was in Bowdle, a tiny town in north central South Dakota. The $2.2 million addition housed three new services—physical therapy, in-home health care and cardiac rehabilitation—as well as an expanded radiology department.

REED, the City of Bowdle, a bank and federal block grants made up the financing package. REED’s contribution was a $400,000 zero-interest loan through the Department of Agriculture’s rural development program.

“The co-op’s [REED] contribution really helped make the whole project a reality,” said Bryan Breitling, the Bowdle Health Care Center’s young administrator.

Six different hospitals in the state and several nursing homes had received REED loans.

“It’s become an important part of what we do,” Salmonson said.