Category: Federal Incentives, Grants & Loans
AGENCY: US Department of Agriculture (USDA) Rural Development (RD), Rural Business- Cooperative Service
DESCRIPTION: The purpose of the program is to finance business facilities and community development projects in rural areas. This is achieved through loans made by USDA Rural development to intermediaries. Intermediaries re-lend funds to ultimate recipients in rural areas (under 25,000 population).
• All IRP loan funds received by an intermediary must be re-loaned to ultimate recipients. Interest income and fees may be used for administrative costs, technical assistance to borrowers or debt retirement. All collections from the operation of the IRP revolving loan fund that are not used for these authorized expenses must be available for re-lending to eligible ultimate recipients.
• Loans from intermediaries to ultimate recipients must be for the establishment of new businesses and/or the expansion of existing businesses, creation of employment opportunities, and/or saving existing jobs, or community development projects. PROGRAM/LOAN STRUCTURE:
• Terms: Loans to intermediaries are scheduled for repayment over a period of up to 30 years. The term of loans to ultimate recipients is set by the intermediary.
• Rates: The interest rate on loans to intermediaries is 1% per annum. The interest rate on loans to ultimate recipients is negotiated by the intermediary and the ultimate recipient.
• Must be private non-profit corporations, public agencies, federally recognized Indian groups or cooperatives;
• Have the legal authority to carry out the proposed loan purposes; and to incur and repay the debt;
• Have a proven record of successfully assisting rural business and industry, normally including experience in making and servicing commercial loans; and
• Provide adequate assurance of payment.
• Ultimate recipients may be private or public organizations, or individuals.
• Applications for intermediaries will be filed with the USDA Rural Development national office in Washington, DC.
• Collateral is required.
• For more information, visit http://www.rurdev.usda.gov/ or call (202) 690-4730.