USDA to Award Up to $1 Billion for Rural Business Loans
The U.S. Department of Agriculture is making up to $1 billion in loan guarantees available to help rural businesses meet their working capital needs during the COVID-19 pandemic. The new loan program comes in the form of the USDA Business & Industry (B&I) CARES Act Program which is a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15.
Important guidelines for the program include:
- Set the application and guarantee fee at 2% of the loan;
- Accept appraisals completed within two years of the loan application date;
- Not require discounting of collateral for working capital loans,
- Extend the maximum term for working capital loans to 10 years
- Provide 90% guarantees on B&I CARES Act Program loans
USDA said that it intends to consider applications in the order they are received. However, the Department may assign priority points to projects if the demand for funds exceeds availability.
“Under the leadership of President Trump, USDA is committed to being a strong partner to rural businesses and agricultural producers and being a strong supporter of all aspects of the rural economy,” USDA Secretary Sonny Perdue said in a prepared statement. “Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment.”
Eligible applicants may contact their local USDA Rural Development State Office in the state where the project is located.