OVERVIEW: U.S. Department of Agriculture – Rural Development provides direct and guaranteed loans for a cooperative organization, corporation, partnership, or other legal entities organized and operated on a profit or nonprofit basis; an Indian tribe on a Federal or State reservation or other Federally recognized tribal group; a public body; or an individual. Loan purposes include but are not limited to:
- Business and industrial acquisitions when the loan will keep the business from closing, prevent the loss of employment opportunities, or provide expanded job opportunities
- 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
The maximum percentage of guarantee is 80% for loans of $5 million or less, 70% for loans between $5 and $10 million, and 60% for loans exceeding $10 million. The total amount of Agency loans to one borrower must not exceed $10 million. The maximum repayment for loans on real estate will not exceed 30 years; machinery and equipment repayment will not exceed the useful life of the machinery and equipment purchased with loan funds or 15 years, whichever is less; and working capital repayment will not exceed 7 years. The interest rate for the guaranteed loan will be negotiated between the lender and the applicant and may be either fixed or variable.
TIMETABLE: Initial applications are accepted on a rolling basis. for specifics consult your USDA Rural Development State Office. Annual renewal fees are due on January 31.
APPLICATION PROCESS: Complete applications should be sent to the USDA Rural Development State Office.
TAGS: business, funding, rural