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USDA Rural Development Program

Business and Industry Loan Guarantees
This program bolsters the availability of private credit by guaranteeing loans for rural businesses.
 
Who may apply for this program?
Lenders with the legal authority, sufficient experience and financial strength to operate a successful lending program. This includes:
  • Federal or state-chartered banks
  • Savings and loans
  • Farm credit banks
  • Credit unions
Are there any restrictions on the borrower?
Any area other than a city or town with a population of greater than 50,000 inhabitants and the urbanized area of that city or town.
The borrower’s headquarters may be based within a larger city as long as the project  is located in an eligible rural area.
The lender may be located anywhere.
Projects may be funded in rural and urban areas under the Local and Regional Food System Initiative.
 
How may funds be used?
Eligible uses include but are not limited to:
  • Business conversion, enlargement, repair, modernization or development
  • Purchase and development of land, easements, rights-of-way, buildings or facilities
  • Purchase of equipment, leasehold improvements, machinery, supplies or inventory
  • Debt refinancing when refinancing improves cash flow and creates or saves jobs
  • Business and industrial acquisitions when the loan will create or save jobs
Guaranteed loan funds MAY NOT be used for:
  • Lines of credit.
  • Owner-occupied housing.
  • Golf courses.
  • Racetracks or gambling facilities.
  • Churches, church-controlled organizations or charitable organizations.
  • Fraternal organizations.
  • Lending, investment and insurance companies.
  • Projects involving more than $1 million and the relocation of 50 or more jobs.
  • Agricultural production, with certain exceptions (1).
  • Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower.