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Rural Grants 

The Business and Industry (B&I) Direct Loan Program

The Business and Industry (B&I) Direct Loan Program provides direct loans to public entities and private parties in rural areas that cannot otherwise get credit. This includes all areas other than cities or unincorporated areas of more than 50,000 people.

Any legal entity is eligible for this direct loan:

• Cooperatives
• Corporations
• Partnerships
• Trusts
• Other profit or nonprofit entities
• American Indian tribes or Federally recognized Tribal Groups
• Municipalities
• Counties

The largest total B&I Direct Loan amount that any one borrower can have is $10 million.

Need More information? Click to: http://www.rurdev.usda.gov/rbs/busp/b&i_dir.htm

Business and Industry Guaranteed Loans

The Business and Industry (B&I) Guaranteed Loan Program guarantees up to 90 percent of a loan made by a commercial lender. Loan proceeds may be used for:

• Working capital
• Machinery and equipment
• Buildings and real estate
• some debt refinancing

B&I loan guarantees can be extended to loans made by recognized commercial lenders or other authorized lenders in rural areas. These include:

• Federal or State chartered banks
• Credit unions
• Insurance companies,
• Savings and loan associations
• Farm Credit Banks or other Farm Credit System institutions with direct lending authority
• Mortgage companies that are part of a bank holding company

The maximum total B&I Guaranteed Loan amount that can be given to any one borrower is $25 million.

Need more information? Click to: http://www.rurdev.usda.gov/rbs/busp/b&i_gar.htm

Intermediary Relending Program

The purpose of the Intermediary Relending Program (IRP) is to finance business facilities and community development projects in rural areas. "Intermediaries" can be private non-profit corporations, public agencies, Indian groups, or cooperatives.

Intermediaries must:

1. Have legal authority to carry out the proposed loan purposes and to incur and repay the debt.
2. Have a record of successfully assisting rural business and industry, normally including experience in making and servicing commercial loans.
3. Provide adequate assurance of repayment.

Ultimate recipients may be private or public organizations or individuals.

At least 51 percent of the owners or members of both intermediaries and ultimate recipients must be United States citizens or admitted for permanent residency. Both intermediaries and ultimate recipients must be unable to obtain the proposed loan elsewhere at reasonable rates and terms.

All of the IRP loan funds must be reloaned to ultimate recipients. Interest income and fees may be used for administrative costs, technical assistance to borrowers, or debt retirement.

Loans from intermediaries to ultimate recipients must be for:

• Starting of new businesses the
• Expansion of existing businesses
• Creation of employment opportunities
• Saving of existing jobs
• Community development projects

For more information, go to http://www.rurdev.usda.gov/rbs/busp/irp.htm

Rural Business Enterprise Grants

Public entities, Non-profit organizations and Federally-recognized American Indian Tribal groups in rural areas can receive Rural Business Enterprise Grants. These can be used for:

• Getting and developing of land
• Construction of buildings, plants and equipment
• Infrastructure
• Refinancing
• Fees for professional services
• Technical assistance and related training for adults
• Startup operating costs and working capital
• Providing financial assistance to a third party
• Production of television programs to provide information to rural residents
• To create, expand, and operate rural distance learning networks.
• To establish or fund revolving loan programs

The businesses that ultimately benefit from these loans must be small and emerging businesses with less than 50 new employees and less than $1 million in gross annual revenues are eligible for assistance. These funds cannot be used for:

• Most agricultural operations except commercial nurseries, timber operations and some agricultural production that provides technical assistance
• Areawide planning
• Loans by grantees with unreasonable rates, terms and charges
• Development of a plan that could move an established business or jobs from one area to another

For other restrictions or more information, please see http://www.rurdev.usda.gov/rbs/busp/rbeg.htm

-Cynthia Nemeth-Johannes