Incentives Directory

RD Business and Industry Guaranteed Loan Program (B&I)

AGENCY: U.S. Department of Agriculture (USDA) Rural Development (RD), Rural Business- Cooperative Service (RBS)
DESCRIPTION: The purpose of the program is to improve, develop or finance business, industry and employment, and improve the economic and environmental climate in rural communities (under 50,000 population) and non-urbanized or non-urbanizing areas. This is achieved by bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits.
ELIGIBLE USES:
• Motels, hotels, bed and breakfast establishments; business and industrial acquisitions; construction, conversion, expansion, repair, modernization or development costs; purchase of equipment, machinery or supplies; startup costs and working capital; processing and marketing facilities; pollution control and abatement; and refinancing for viable projects under certain conditions are eligible uses.
PROGRAM/LOAN STRUCTURE:
• Percentage of guarantee:?o 80%guaranteeonloans$5millionorless;
• 70% guarantee on loans $5 million to $10 million;
• 60% guarantee on loans over $10 million; and
• 90% guarantee on loans $10 million or less considered on an exception basis.
• A maximum aggregate B&I Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25 million. A maximum of 10 % of program funding is available to value- added cooperative organizations for loans above $25 million to a maximum aggregate of $40 million.
• Equity: Minimum 10% tangible balance sheet equity for an existing business; minimum 20% tangible balance sheet equity for a new business. Higher requirements may be imposed.
• Maturities: Seven years for working capital; 15 years or useful life for the purchase of machinery and equipment; 30 years for real estate; and refinancing based on collateral.
• Rates: Fixed or variable, and negotiated between the lender and the borrower.
• Fees: 2% guarantee fee on the guaranteed portion of the loan. 1% guarantee fee available under ?certain circumstances.
QUALIFICATION CRITERIA/COMMENTS:
• Priority is given to projects in communities under 25,000 in population.
• Any legal entity including individuals, public and private organizations, and federally recognized ?Indian tribal groups are eligible borrowers.
• Visit https://www.rd.usda.gov/programs-services/business-industry-loan-guarantees for more information.
• Rural Development Homepage: https://www.rd.usda.gov/.

Category: Local Incentives, Grants & Loans

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