For this article, our commercial loan experts at North Avenue Capital (NAC) wanted to share with you some facts about USDA Business Industry (B&I) Loans, Community Facility (CF)Direct Loan and Grant Program and the Renewable Energy for America Program. By reading these facts below, we hope this gives you clarity on what type of loan you should and can apply to and be eligible for.
The USDA Business & Industry (B&I) Loan Program
- The program is a loan program designed by the USDA Rural Development Program to help credit-worthy rural businesses obtain needed credit to grow and create jobs in their local communities.
- The program bolsters the availability of credit by guaranteeing loans for businesses in rural areas across the US.
- USDA business loans are designed to help rural business owners.
- USDA business loans are an easy way for rural business to receive access to capital.
- To qualify for a USDA loan, your business/project needs to be in a certain geographic area with a population of 50,000 or less.
- The type of businesses that qualify for a USDA business loan include for-profit businesses, non-profits, public bodies, cooperatives, individuals, and federally recognized tribes.
- You must be a U.S. citizen or live in the United States with a legal status to be eligible for this loan.
- USDA business loans from $1 million to $25 million in amount, with a sweet spot of $2 million to $10 million. At NAC, we do not fund loans under $1 million.
- There is a limited supply of USDA loans, which means the process to get one is competitive.
USDA Community Facilities (CF) Direct Loan and Grant Program
- This program provides affordable funding to develop essential community facilities in rural areas. An essential community facility provides an essential service to the local community (hospitals, courthouses, fire departments, museums, libraries, food pantries, nursing homes, police stations, prisons, greenhouses, etc.) and does not include private, commercial or business undertakings.
- Eligible borrowers of CF loans and grants include public bodies, community-based non-profit corporations, and federally recognized tribes.
- To qualify for a CF loan or grant, your business must be in a city, village, township and town or Federally Recognized Tribal Lands with no more than 20,000 residents.
- CF funds can be used to purchase, construct, and/or improve essential community facilities, purchase equipment and pay related project expenses.
- GF loans are low interest direct loans or grants or a combination.
- Priority for a CF loan is based on population and median household income (small communities with a population of 5,500 or less with a median household income below 80% of the state nonmetropolitan median household income.
- It is a competitive process to get a CF.
USDA Renewable Energy for America (REAP)
- This program assists rural small businesses and agricultural producers by conducting and promoting energy audits and providing Renewable Energy Development Assistance (REDA).
- Those eligible for this program include state and local governments, federally recognized tribes, a land-grant college or university or other institutions of higher education, rural electric cooperatives, public power entities, an instrumentality of a state, tribal or local government, and a Resource Conservation & Development Council.
- The funds must be provided to rural small businesses and the small business (not the agricultural producers) must be in eligible rural areas.
- Funds may be used for energy audits, renewable energy technical assistance, renewable energy site assessments, salaries related to the project, travel expenses related, office supplies, and administrative expenses.
- The maximum aggregate amount of an energy audit and REDA grant in a Federal fiscal year is $100,000.
- Applications are year-round.
Looking to Apply for a USDA Small Business Loan?
Our USDA Loan officers at North Avenue Capital, LLC (NAC) will determine if a USDA loan is right for your financing needs. NAC is the only specialized commercial lender that exclusively lends USDA B&I Loans nationwide. It’s all we do.We have taken the time to create relationships with the USDA National and State offices to provide the best lending experience for our borrowers. We offer competitive interest rates, flexible terms, and high LTVs, and will walk you through the steps of eligibility.
We will let you know what you need to apply for a USDA small business loan, as well as let you know what you are allowed and not allowed to use the funds for to be approved for a loan. At NAC, our mission is to provide capital to empower American business growth. Because NAC is a non-traditional, private lender, we can provide our borrowers with the terms that fit their financial needs.
NAC possesses a genuine interest in partnering with you to enhance your business, create jobs in local communities and identify opportunities to improve environmental conditions for the next generation of entrepreneurs. We have experience starting, building, and operating successful businesses across multiple industries, and are committed to forming lasting partnerships, not just closing loans.
As one of the only non-bank lenders in the country exclusively focused on USDA Rural Development programs, NAC uses its expertise, capital, and relationships to build businesses, grow local economies, and create jobs in rural America.
Ready to work with one of our USDA business loan specialists?
Visit our USDA business loans page to learn more or call us at 8665264950 with any USDA business loan questions or to determine your USDA business loan eligibility.
We have office locations in Tennessee, Texas, Georgia, Nevada, and Florida, but we are not limited by geographic location like many rural-oriented financial institutions and can partner on projects in all 50 states.