PROMISSORY NOTE (Variable Rate, Revolving Loan)

Exhibit 10.2

PROMISSORY NOTE

(Variable Rate, Revolving Loan)

FOR VALUE RECEIVED, N0RTHERN LIGHTS ETHANOL, LLC, a South Dakota Limited Liability Company (“Borrower”), hereby promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION, a national banking association (“Lender”, which term shall include any future holder hereof), at 141 N. Main Avenue, Sioux Falls, South Dakota, or at such other place as Lender may from time-to-time designate in writing, in lawful money of the United States of America, the principal sum of Nine Million & 00/100 Dollars ($9,000,000.00) or so much thereof as may be advanced hereunder.

CALCULATION OF INTEREST. Interest on each advance hereunder shall accrue at an annual rate equal to 3.00% plus the one-month LIBOR rate quoted by Lender (LIBOR + 3.00%), which shall be the one-month LIBOR rate in effect two New York Banking Days prior to the stated monthly reprice date, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation, such rate to be reset monthly on the last day of the month. The term “New York Banking Day” means any date (other than a Saturday or Sunday) on which commercial banks are open for business in New York, New York. Lender’s internal records of applicable interest rates shall be determinative in the absence of manifest error. If the initial advance under this Note occurs other than on the first day of the month, the initial one-month LIBOR rate shall be that one-month LIBOR rate in effect two New York Banking Days prior to the date of the initial advance, which rate shall be in effect on the remaining days of the month of the initial advance.

PAYMENT OF INTEREST. Payments of all interest accrued hereunder shall be made on the last day of any month in which any amount is outstanding hereunder.

REVOLVING FEATURE. Borrower may from time to time prior to the Maturity Date draw, on a revolving basis, the difference of the outstanding principal amount hereunder and the lesser of (i) the Borrowing Base and (ii) Nine Million Dollars ($9,000,000.00) (the greater of the two being the “Loan Maximum”). Lender’s obligation to make any advance under this Promissory Note is conditioned upon (i) all representations and warranties made by Borrower in the Loan Agreement remaining true, accurate and complete, (ii) Borrower’s continued compliance with all other terms and conditions of this Promissory Note and the Loan Agreement including any preconditions to any advance hereunder contained in the Loan Agreement, (iii) no Event of Default having occurred under this Promissory Note, or any other Promissory Note between the parties hereto, or under any other Loan Document, and (iv) Borrower shall demonstrate to Lender’s satisfaction that the funds requested to be advanced shall be used in the operation of Borrower’s ethanol production facility. Subject to these conditions, Lender shall advance to Borrower hereunder, such amounts as Borrower may from time-to-time request, not to exceed the total principal amount at any one time outstanding hereunder of Nine Million Dollars ($9,000,000.00). Such requests for advances hereunder shall be funded the next Business Day if received by Lender not later than 11:00 a.m. of any Business Day, subject to Lender requiring additional time to confirm Borrower has satisfied the conditions of this Note (including the Borrowing Base requirements provided for below) at the time each such advance is requested and made.

PAYMENT IN FULL AT MATURITY. The maturity date of this Note is July 30, 2008 (the “Maturity Date”). The total unpaid principal amount and all interest thereon and any other amount due hereunder shall be payable on the Maturity Date. THIS NOTE REQUIRES A BALLOON PAYMENT.

PAYMENT DUE ON NON-BUSINESS DAY. In the event any payment due under this Note is due on a date other than a Business Day (as defined in the Loan Agreement), such payment shall be due on the Business Day immediately following the day the payment was otherwise due.

PREPAYMENTS. Borrower may prepay this Note in whole or in part at any time, and if in part from time-to-time, during the entire term of this Note, without penalty or premium. No prepayment shall reduce the amount of any scheduled payment.

MANDATORY PAYMENTS PRIOR TO MATURITY. In the event the amount outstanding hereunder at any time, including interest and any other amounts, exceeds the amount which could be borrowed on such date according to the then applicable Borrowing Base (the “Eligible Balance”), Borrower shall immediately pay to Lender an amount not less than the difference between such balance and the Eligible Balance.

BORROWING BASE. Definitions. As used in this Promissory Note: “Borrowing Base” means, as of the day for which it is calculated, .75 (75%) of the total of (i) the fair market value of the outstanding Inventory, (ii) the Eligible Accounts Receivable, and (iii) hedging accounts at fair market value; “Inventory” means all Borrower’s corn, and ethanol, and DDGS Inventory, as determined to Lender’s satisfaction; “Eligible Accounts Receivable” means Accounts (as defined in the Uniform Commercial Code) owned by Borrower that were generated by Borrower’s sale of Inventory, minus Ineligible Accounts; “Ineligible Accounts” means Accounts which either have been outstanding more than 90 days, or Accounts which otherwise would be Eligible Accounts Receivable that Lender determines in its discretion should not so qualify. Eligible Accounts Receivable shall exclude Borrower’s “contra” accounts and any other obligations or offsets which any of Borrower’s account obligors may claim against Borrower.

Borrower Reports. Each request for an advance hereunder shall be accompanied by Borrower’s report to Lender evidencing the Borrowing Base as of the close of the previous Business Day, in a form and containing such content as Lender shall from time-to-time specify to Borrower, including but not limited to: reports of the Borrower’s Accounts itemized by age; reports of the Inventory itemized by type, including its quantity, geographical location, and information identifying any third party in possession or control thereof Borrower Report shall also report Eligible Accounts Receivable on a gross basis, and be itemized as to all offsets that may be claimed by any account obligor as further set forth in the definition of Eligible Accounts Receivable above, if at the end of any calendar month any amount is outstanding hereunder, not later than the 15th day of the following month, Borrower shall provide Lender a report containing the above information as of the end of such prior month. Borrower shall also provide Lender such reports at other times specified by Lender. The request for advances shal