EXHIBIT 10.7

Assumption Agreement

This Assumption Agreement (the “Agreement”) is entered into among Granite Falls
Energy, LLC, a Minnesota limited liability company (hereinafter “GFE”), Project
Viking, LLC, a Minnesota limited liability company (hereinafter “Viking”),
Roland J. Fagen (hereinafter “Mr. Fagen”) and Granite Falls Bank (hereinafter
“Lender”).
 
WHEREAS, as a condition to its purchase of Viking, GFE has agreed to assume all
obligations as Borrower under that certain Promissory Note in the principal
amount of $5,000,000 having Loan Number 28407 (the “Note”) between Viking and
Mr. Fagen, who are jointly and severally the current Borrower on the Note, and
Lender, and
  
WHEREAS, Lender is willing to consent to the assumption by GFE of the Note
pursuant to the terms and conditions set forth herein.
  
NOW THEREFORE, in consideration of Lender’s agreement to allow GFE to assume
primary responsibility for payment of the Note, the parties agree as follows:
  
1.    Assumption of Borrower Status by GFE. Upon the date hereof, GFE shall
become the Borrower on the Note. GFE hereby agrees to the assumption of all
obligations of Borrower under the Note.

2.    Ongoing Obligations. The assumption by GFE of the obligations of Borrower
under the Note shall not serve to release Viking and Mr. Fagen from their
payment obligations in the event GFE fails to make payments due on the Note. On
the date hereof, the parties have entered into that certain Creditor and Debtors
Agreement, which addresses, among other things, the manner in which Lender shall
pursue collection on the Note as between GFE, Viking and Mr. Fagen.

3.    Supplement to Note. Except as expressly amended or supplement hereby, the
Note is and shall remain in full force and effect.

4.    Law Governing. This Agreement shall be interpreted in accordance with and
governed by the laws of the State of Minnesota.

5.    Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the heirs, executors, administrators and successors of the
parties hereto, but no right or liability or obligation arising hereunder may be
assigned by any party hereto without the prior written consent of all other
parties.

6.    Counterparts, Separate Signature Pages. This Agreement may be executed in
any number of counterparts, or using separate signature pages. Each such
executed counterpart and each counterpart to which such signature pages are
attached shall be deemed to be an original instrument, but all such counterparts
together shall constitute one and the same instrument. A signed copy of this
Agreement

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EXHIBIT 10.7

delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.

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EXHIBIT 10.7

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.

GRANITE FALLS ENERGY, LLC

By /s/ Paul Enstad            
Its Chairman                

PROJECT VIKING, L.L.C.

By /s/ Roland J. Fagen            
Its President & Managing Member    

/s/ Roland J. Fagen            
Roland “Ron” J. Fagen

GRANITE FALLS BANK

By /s/ John C. Virnig            
Its President