This Nick-Name Is Called USDA! It’s the Rainbow You’ve Been Looking For!
One of the best small business loan operatives is a government entity you probably have never heard of called the U.S. Department of Agriculture. Now, hold it, people. Don’t let the word “agriculture” get you off track. This government entity also provides rural housing and rural business and industrial loans that uses the title: B&I Guaranteed Loan Program. If your small or large business is located in a rural community, and there are plenty of those in this country, you may qualify for special financing.
The USDA currently maintains an industrial and certified business loans program and provides guarantees of up to 80 percent of the loan you receive by a commercial lender who is licensed to do business with the USDA.
Proceeds for a B&I business loan can be used as follows:
- Working capital
- Funds for equipment and machinery needed to operate your business
- Finance buildings and other real estate property
- Certain types of debt refinancing if you already own a small business
A B&I fact sheet is available to all comers and provides all you need to know about obtaining one of these loans, including eligibility, loan terms and interest rates as well as equity requirements. Like the SBA loan program mentioned earlier, all applicants will need to go through your local bank or credit union or other financial institution to apply for a B&I loan. Also, like the SBA loan program, the B&I loan only guarantees the deal; it doesn’t actually fund it. If you get confused just go online to the USDA Rural Development web site and locate your local or state field office.
Can We Talk About Rural Business Development Grants For A Moment?
This arm of the USDA also has a fact sheet that will make it easy to understand how the program works. The Rural Business Development Grant (RBDG) is a very competitive grant program designed to support targeted technical assistance, training and other activities leading to the development or expansion of small and/or emerging businesses in rural areas of the United States. However, this unique grant program does have some “gotcha” terms to be concerned with like having fewer than 50 employees and less that $1 million in gross revenues all of which should fit nicely for most small business folks.
Who May Apply For this Grant Program?
Rural public entities include, but not limited to the following:
- State agencies
- Nonprofit corporations
- Institutions of higher education
- Federally-recognized Indian Tribes
- Rural cooperatives
Eligible areas would be towns and rural areas outside cities with a population of 50,000 or more.
Note: eligible area lists can be found online at USDA B&I. In terms of funding amounts, there is NO maximum grant amounts for enterprise type grants, however, smaller request that are truly a small business loan are give higher priority. Generally, grants will range from $10,000 up to $500,000. You can use these funds in a plethora of ways. Applications and information are accepted via the USDA Rural Developments local or state offices.