As U.S. businesses continue to emerge from the COVID-19 pandemic, many are looking for ways to steady their operations and set a new path for future growth. For many, a USDA Rural Development Business & Industry (B&I) Loan may be just what the doctor ordered.

Since first emerging in late 2019, Coronavirus disease 2019 (COVID-19) has caused major economic shock to both small and large businesses across the United States. Only a few weeks into the crisis, many businesses began wrestling with mass layoffs and closures. At the time, no one really understood how long these disruptions might last. Today, nearly two years later and just cresting the third wave of coronavirus outbreak, the answer to that question is still not perfectly clear, but there seems to be light at the end of the tunnel.

Government aid, in the form of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the rollout of a robust vaccination program, and simply learning how to work around the challenges of the disease have helped distance many from the worst of the crisis. At the same time, with the sunsetting of loan/grant programs like the Paycheck Protection Program (PPP) and cash on hand limited for many, businesses remain financially fragile.

Fortunately, other initiatives like the USDA’s Rural Development Business & Industry (B&I) Loan Program have simultaneously been gaining increased visibility, while also being continuously refined and strengthened to support rural businesses in ways that align with current market conditions, and maximize the potential for future success. The program, also known as the “OneRD Guaranteed Loan Initiative”, provides USDA-backed loan guarantees to lenders to make collateral-backed commercial loans available to credit-worthy rural borrowers. This in turn provides businesses with the capital they need to grow and create jobs in their local communities.

The Business & Industry (B&I) Loan program is one of several offered by the USDA and is its largest and most popular. North Avenue Capital is America’s #1 USDA Business & Industry (B&I) Lender. These loans, which feature attractive fixed or variable interest rates (tied to the Wall Street Journal Prime Rate +1-3%), and terms (7, 15 or 30-year loan periods), can be for amounts from $2 million to as high as $25 million, and even up to $40 million for certain cooperatives. They can be used by a wide range of for-profit and non-profit businesses (not limited, nor even focused on agriculture) for all kinds of purposes including everything from new business development to business expansion, acquisition, modernization, conversion, repair, equipment & supplies purchases, and most recently, debt refinancing.

A Broad Definition of “Rural”: 97% of America

At first glance, many businesses might discount USDA Rural Development Loans as a potential option for their capital needs due to misassumptions about what qualifies as a “rural” business. However, prospective borrowers should know that under the USDA’s most recent, standardized definition – any town or city with 50,000 or fewer residents – that this inherently incorporates 97% of all American towns. Many business owners are often surprised to learn that they reside in a qualifying geographic area. Even businesses with headquarters in larger, non-rural metropolitan areas can obtain USDA Rural Development Loans for branches, divisions and franchises located within qualifying rural communities. You can find out if your address qualifies in mere seconds using this simple interactive map.

A Potential “Cure” for Business Financial Instability Brought About by COVID-19

The availability of funding in areas with moderately sized populations, the fact that the loans are not restricted to agricultural businesses, and the appealing rates, terms and loan amounts are just a few of the many benefits of USDA Rural Development B&I Loans. But perhaps more than this is the lifeline that the OneRD program represents for many rural businesses in the post-pandemic world.

Even in the best of times, it is hard for most entrepreneurs and business owners in rural areas to access capital due to the associated risks for commercial lenders. COVID-19 only served to multiply these risks. In rural and larger metropolitan areas across the country, businesses suffered negative economic impacts to businesses at levels not seen since the Great Depression in the 1930’s. They were forced to temporarily close, dramatically cut expenses, and attempt to continue operations with little cash on hand, or accessible through traditional commercial lending programs, especially in rural areas.

As a result, many businesses declared bankruptcy. Others, who managed to successfully navigate the early days of the pandemic with savvy maneuvering and vital support from programs like the USDA CARES Act and SBA PPP initiative were surprised by the frustrating duration of the virus which seemed to match their own high levels of business resilience and tenacity. Today, even with optimism increasing for those businesses, the availability and immediacy of new funding remains crucial for many. For those, USDA Rural Development B&I Loans may be the perfect cure for insuring their business against future surprises and resuming their vision for growth. For other rural entrepreneurs, it could even mean proceeding with the launch of a start-up or plans for a new business acquisition that were tabled at the onset of the pandemic.

Contact North Avenue Capital to Learn More About USDA Rural Development B&I Loans

Contact North Avenue Capital today to talk to one of our lending experts about USDA Rural Development Loans. We can help you learn more about these smart, valuable programs and help you get the capital you need to support your business during uncertain times, continue growing or get a new effort off the ground. We have offices in Northeast Florida, Nevada, Arkansas, Georgia, Tennessee and Texas and partners for USDA loans in all 50 states.