U.S. Department of Agriculture Rural Development

USDA Rural Development is an economic development agency of the federal government committed to helping improve the economy and quality of life in rural America.

USDAUSDA RD financial programs support such essential public facilities and services as water and sewer systems, housing, health clinics, emergency service facilities and electric and telephone service. They promote economic development by supporting loans to businesses through banks, credit unions and community-managed lending pools. They offer technical assistance and information to help agricultural producers and cooperatives get started and improve the effectiveness of their operations. They provide technical assistance to help communities undertake community empowerment programs.

This outline contains information about USDA Rural Development programs applicable to businesses. Contact USDA RD for information about other programs.

Type of Businesses Served:

  • All types that qualify for specific programs
  • USDA RD serves rural areas typically defined as towns with 50,000 or fewer people, although some programs have lower maximum population requirements or apply to disadvantaged areas of metropolitan counties

Stage of Businesses Served: 

Funding Style:

Funding Range

  • Up to $25 million

Applicant Requirements

  • Varies by program

Lending Programs

Business and Industry Guaranteed Loans (B&I) program can back loans as high as $25 million to qualifying ventures in towns with 50,000 or fewer people. Money can be used for business and industrial acquisitions to keep a business from closing or to help it with conversion, expansion, modernization or the purchase and development of land, easements, rights-of-way, buildings or facilities. Money also can be used to buy equipment, leasehold improvements, machinery, supplies or inventory. Read more:

USDA REAP funding

This 42 panel solar photovoltaic system was installed at the Bar VK Ranch south of Silver City using REAP funds.

Rural Energy for America Program (REAP) Guaranteed Loan Program encourages financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydro power) and energy efficiency projects. Under the program, project developers work with local lenders, who in turn can apply to USDA Rural Development for a loan guarantee up to 85 percent of the loan amount.

Biorefinery Assistance Program provides loan guarantees for the development, construction, and retrofitting of commercial-scale biorefineries. The program will loan up to $250 million to eligible applicants who provide sufficient collateral and obtain at least 20 percent of project financing from institutions that are not federal agencies. All projects require an independent feasibility study and technical assessment as part of the application.

Intermediary Relending Program (IRP) provides money to local organizations such as tribes, public agencies and non-profit organizations for re-lending that finances business and economic development activity to create or retain jobs in disadvantaged and remote communities. Qualified individuals and businesses in areas with a population of 25,000 or less may borrow up to $250,000 to purchase or develop land, make leasehold improvements, acquire machinery or supplies, or complete feasibility studies. Allowable uses also include start-up costs and working capital, pollution control, transportation and acquisition, construction, conversion, enlargement, or repair of a business or business facility. These are examples and other uses may qualify. Organizations interested in applying for this funding should contact USDA directly.

Other USDA RD Loan Programs make money available to local organizations for economic development projects or re-lending.

Grant Programs

Zuni Pueblo Housing

USDA Rural Development State Director Terry Brunner (l) oversee the signing of the Self Help Housing agreement, which uses USDA funds.

Rural Energy for America Program (REAP) Grant Program provides financial assistance to agricultural producers and rural small businesses in rural America to purchase, install, and construct renewable energy systems; make energy efficiency improvements to non-residential buildings and facilities; use renewable technologies that reduce energy consumption; and participate in energy audits, renewable energy development assistance, and feasibility studies. It is often used in conjunction with the REAP loan guarantee program. An ancillary REAP grant program grants on a competitive basis up to 25% of total eligible costs for renewable energy feasibility studies.

Value Added Producer Grants are awarded on a competitive basis and provide up to $100,000 for planning and up to $300,000 for working capital to help agricultural producers generate new products. Priority may be given to farmers or ranchers in the startup phase, socially-disadvantaged, or operating a small or medium-sized enterprise structured as a family farm or cooperative. There is a cost-sharing requirement and applications may only be submitted during the prescribed time period. Read more:

Small Socially-Disadvantaged Producer Grant Program program provides money for technical assistance to small, socially-disadvantaged agricultural producers through eligible cooperatives and cooperative development centers. Grants are awarded once a year on a competitive basis.

Other Grant Programs with specific and narrowly-defined uses are offered by USDA RD. Many of these programs are designed for use by public entities (towns, tribes, communities) that promote sustainable economic development through infrastructure projects, business development and non-profit projects that enhance education and quality of life in rural areas.

Other USDA-related articles:

Contact:

Comments are closed.