USDA Loans and Grants Available for Rural Commercial Development
Rural areas across the country that have weakening economies and evaporating business is getting a boost from the US Dept of Agriculture (USDA). The USDA's Rural Development Division has designed loan and grant programs to spur business lending and commercial growth for small businesses in rural areas. With the objective of creating jobs and economic development these programs give small businesses an equitable chance to succeed and help rural areas expand and grow.
These programs can help small businesses and entrepreneurs by loaning money for building and capital purchases. Or provide grants to help create sustainable programs that help train and provide technical service for cooperatives and utility services. And even grant moneys to public agencies for rural and community development.
Business and Industry (B & I) Loan
This USDA loan program offers up to $25 million in loan funds for the development of business in rural areas of less than 50,000 population. The loan is guaranteed by the USDA and disbursed by third party lenders, usually banks and mortgage companies. Loan proceeds can be used for the purchase of real estate, equipment and inventory, and working capital.
Intermediary ReLending Program (IRP)
The IRP was developed to lend funds up to $15 million to intermediary relenders for redistribution to eligible recipients. Intermediaries include public agencies, nonprofit corporations, Indian tribes, and cooperatives, who run small loan programs for small business development. Smaller loans of up to $250,000 may be redistributed to business owners to stimulate economic activity in rural communities of 25,000 or less.
Rural Business Enterprise Grant (RBEG)
The RBEG program was developed to provide grants to rural public entities, Indian tribes, and private non-profit corporations who in turn finance rural public development. Development projects can include acquisition of land or right-of-way easements, pollution control, and construction or renovation of buildings and roads. The RBEG grant does not have a limit, but priority is given to smaller projects.
Rural Co-operative Development Grant (RCDG)
The overall goal of this grant is to assist economic development in rural areas. Grants are provided to establish, operate, and encourage cooperative centers that help in the economic development of rural communities.
Value-Added Producer Grants (VAPG)
These grant funds may be utilized as working capital to promote and market value-added agricultural products. Recipients may include independent producers, agricultural cooperatives, and ranch cooperatives who wish to enhance or change products, segregate products, and to develop farm-based renewable energy.
Rural Business Opportunity Grant (RBOG)
The RBOG was developed to further assist training and technical assistance in rural communities. Public agencies, non-profit corporations, rural Indian tribes, and cooperatives receive these grants in order to develop training and technical assistance programs that promote sustainable economic development.
Renewable Energy and Energy Efficient Program (REEE)
The REEE grant is available to individuals and small business owners who demonstrate financial need. The grant funds must be specifically used to purchase energy efficient products, appliances, and systems, and to make energy efficient improvements. Grant amounts are limited to $250,000 for energy efficient projects, and $500,000 for energy renewable projects.
The USDA is committed to providing assistance to rural communities and helping local agencies, non-profit organizations, and cooperatives utilize available resources to stimulate dwindling local economies. With the creation of these loan and grant programs rural communities have the resources available to sustain and continue economic development.
If you are in need of a loan to fix your home or make improvements, and you live in a rural area you may be eligible for the Rural Housing Repair and Rehabilitation Loan. Contact the USDA for more information on this and more valuable loan programs.
