The Business and Industry Loan Guarantees improve 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.
An applicant must be a federal or state-chartered bank, savings and loan, farm credit bank, or credit union (the “Program Applicant”).
A successful Program Applicant may then facilitate the Business and Industry Loan Guarantees for the following “Program Borrowers:” for-profit businesses; nonprofit corporations; cooperatives; federally-recognized Tribes; public bodies; and individuals.
Program Borrowers may use the USDA loan guarantee for: (a) business conversion, enlargement, repair, modernization or development; (b) purchasing and developing of land, easements, rights-of-way, buildings or facilities; (c) purchasing of equipment, leasehold improvements, machinery, supplies or inventory; (d) debt refinancing when refinancing improves cash flow and creates or saves jobs; and (e) business and industrial acquisitions when the loan will create or save jobs.
However, Program Borrowers may not use the USDA loan guarantee for: (a) lines of credit; (b) owner-occupied housing; (c) golf courses; (d) racetracks or gambling facilities; (e) churches, church-controlled organizations or charitable organizations; (f) fraternal organizations; (g) lending, investment and insurance companies; (h) projects involving more than $1 million and the relocation of 50 or more jobs; (i) agricultural production, with certain exceptions; or (j) distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower.