Business and Industry Loan Guarantees

Department of Agriculture, Rural Business Service

Program Type:

Loan Guarantee

Eligible Geography:

Nationwide

Summary:

The Business and Industry program bolsters the availability of private credit by guaranteeing loans for rural businesses. This program improves the economic health of rural communities by increasing access to business capital through loan guarantees that enable commercial lenders to provide affordable financing for businesses in eligible rural areas.

The loan guarantee percentage is published annually in a Federal Register notice. B&I loans approved in Fiscal Year 2021 will receive an 80 percent guarantee.

Eligible Recipients:

For-Profit Business; Local Government; Non-Profit Organizations; Financial Institution

Eligible Recipients Detail:

For-Profit Businesses; Non-Profits; Cooperatives; Tribes; Public Bodies; Sole-proprietors or entrepreneurs are all eligible to receive guaranteed loans. Federal and State chartered banks; Savings and Loans; Farm Credit Banks; Credit Unions can all be approved as lenders for guaranteed loans.

Eligible Purpose:

Broadband Enabled Devices (General); Building Connectivity; Anchor Institution Connectivity; Last Mile Connectivity

Eligible Purpose Detail:

Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents. Business loans can be used for:

-Business conversion, enlargement, repair, modernization or development.
-The purchase and development of land, buildings and associated infrastructure for commercial or industrial properties.
-The purchase and installation of machinery and equipment, supplies or inventory.
-Debt refinancing when such refinancing improves cash flow and creates jobs.
-Business and industrial acquisitions when the loan will maintain business operations and create or save jobs.

Other Eligibility Criteria:

Eligible applicants in rural areas with less than 50,000 persons can apply. Check eligible addresses here - https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=RBSmenu&NavKey=property@13

Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

Funding Match/Terms:

Collateral must have documented value sufficient to protect the interest of the lender and the Agency. Lenders will discount collateral consistent with sound loan-to-value policy with the discounted collateral value at least equal to the loan amount. The lender must provide satisfactory justification of the discounts being used. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).

Note/Additional Resources:

https://www.rd.usda.gov/sites/default/files/fact-sheet/508_RD_FS_RBS_BIGuarantee.pdf

Source:

https://broadbandusa.ntia.doc.gov/sites/default/files/bbusa_federalfunding_all_200511.pdf