The United States Department of Agriculture (USDA) currently offers many loan and grant funding programs available to promote business and growth in rural communities. USDA Business loans work in partnership with the private sector to help fund businesses that create or maintain quality jobs and or promote a clean rural environment. USDA Business loans provide excellent opportunities to help create jobs and stimulate rural economies by providing much needed financial backing.
How USDA Business Loans Work
USDA Business loans works by guaranteeing quality loans for businesses and projects that are designed to produce lasting benefits to a rural community. The USDA Business loan program guarantees up to 80% of a loan made by a commercial lender which can be used for working capital, equipment, machinery, buildings and real estate, and certain types of debt refinancing. Also, the borrower must be engaged in a business that will provide employment, improve the economic or environmental climate. This can include promoting the conservation, or development of water resources or reducing the reliance on nonrenewable energy resources by encouraging the development of renewable energy systems.
USDA Business Loan Eligibility
The USDA Business Loan program is eligible for any legal entity including individuals, partnerships, corporations, non profit corporations, public bodies, cooperatives, Indian tribes and private companies. USDA loans are generally up to 30 years for real estate improvements, up to 15 years for machinery, equipment, furniture, and fixtures, and up to 7 years for working capital.
To qualify you must be a citizen of the United States or reside in the U.S. and be legally admitted for permanent residence. Corporations or other nonpublic organizations must be at least 51% owned by persons who are U.S. citizens or are legally aloud to permanently reside in the United States. USDA Business loans are available in rural, or small town areas, with a population of less than 50,000 residents. These eligibility terms can change from state to state so make sure to contact your local USDA office for more information.
USDA Business Loan Information
USDA Business Loans often require some form of collateral which must be documented to the protect the interest of the lender and the USDA. Mandatory collateral value may vary state to state but typically needs to be at least equal to the loan amount in question. Loan arrangements can vary from up to $500,000 to $10,000,000. Contact your local USDA Business loan office for more information.