U.S. Department of Agriculture (USDA)- Guarantee, Loans and Grants

Thursday January 22nd, 2004

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U.S. Department of Agriculture (USDA)- Guarantee, Loans and Grants

The USDA has a number of financial federal programs. However, the major programs for small businesses are administered through the USDA Rural Development's division. The program objective is to create incentives for business lending or investments in the rural areas and for economic development by saving and creating jobs. To determine if the area is eligible and is considered rural, click on to: www.rurdev.usda.gov/rbs/busp/b&i;_gar.htm.

USDA PROGRAMS FOR RURAL BUSINESSES
USDA PROGRAM	DESCRIPTION OF PROGRAM	TYPICAL FUNDING
Business & Industry Guaranteed Loan (B & I)	USDA guarantees business loans made by banks approved by USDA. It is lender-driven. Purpose: The loans guaranteed can be for real estate, equipment, working capital and refinancing-for non-farm businesses. Eligibility areas: All rural areas other than cities of more than 50,000 population and their adjacent urbanized areas. www.rurdev.usda.gov/rbs/busp/b&i;_gar.htm	$1 million - $10 million
Rural Business Enterprise Grant (RBEG)	Grants provided to assist public bodies, nonprofit corporations and federally recognized Indian tribal groups finance and facilitate development of small and emerging private business enterprises. Purpose: For acquisition and development of land and construction of buildings, plants, equipment, and refinancing. Eligibility areas: All rural areas other than cities of more than 50,000 population and their adjacent urbanized areas. http://www.rurdev.usda.gov/ga/trbeg.htm	$25,000-$100,000
Inter-mediary ReLending Program (IRP)	Funds are lent to intermediaries, which, in turn, provide loans to recipients who are developing business facilities or community development projects. Eligible intermediaries include public bodies, nonprofit corporations, Indian tribes and cooperatives. Purpose: Capitalizes locally run revolving loan programs for small businesses unable to qualify for bank financing. Eligible areas: Unincorporated areas with less than 25,000 population. www.rurdev.usda.gov/rbs/busp/irp.htm	Max. of $750,000 to relenders for business loans up to $150,000
Rural Co-operative Develop.Grant (RCDG)	Loans and grants are available to rural utilities service electric or telecommunications borrower. Purpose: To finance startup ventures and business expansion projects; to establish revolving loan programs operated at local level by the utility and to overall assist in economic development in rural areas. Eligible areas: Rural population All rural areas other than cities of more than 50,000 population and their adjacent urbanized areas. http://www.rurdev.usda.gov/co/redgl.htm	$50,000 - $300,000
Value-Added Ag Product Market Dev. Grants (VADG)	Makes grant to help producer-owned businesses add value to products Purpose: For working capital and adding value for: Change in product physical state. Enhance product value. Product segregation. Product produces renewable energy. http://www.rurdev.usda.gov/rbs/coops/vadg.htm	$50,000 - $300,000