Business & Industry Loan Guarantees Program
Federal Agency: U.S. Department of Agriculture
Description: The Business & Industry Loan Guarantees Program bolsters the availability of private credit by guaranteeing loans for rural businesses.
Eligible applicants: Lenders with the legal authority, sufficient experience and financial strength to operate a successful lending program. This includes:
- Federal or state-chartered banks
- Savings and loans
- Farm credit banks
- Credit unions
What kind of businesses qualify for loan guarantees?
- For-profit business
- Non-profit entities
- Federally recognized Tribes
- Public bodies
Eligible activities: Eligible uses include but are not limited to:
- Business conversion, enlargement, repair, modernization, or development
- Purchase and development of land, easements, rights-of-way, buildings, or facilities
- Purchase of equipment, leasehold improvements, machinery, supplies, or inventory
- Debt refinancing when refinancing improves cash flow and creates or saves jobs
- Business and industrial acquisitions when the loan will create or save jobs
Ineligible uses for guaranteed loan funds include but are not limited to:
- Lines of credit
- Owner-occupied housing
- Golf courses
- Racetracks or gambling facilities
- Churches, church-controlled organizations or charitable organizations
- Fraternal organizations
- Agricultural production, with certain exceptions
- Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower
Award ceiling (MAX):
- 80% for loans up to $5 million
- 70% for loans between $5-10 million
- 60% for loans exceeding $10 million (up to $25 million)
What are the interest rates?
- Interest rates are negotiated between the lender and borrower, subject to USDA review.
- Rates may be fixed or variable.
- Variable interest rates may not be adjusted more often than quarterly.
Award floor (MIN): N/A
Funding Availability: $1 billion*
*The CARES Act includes an additional $1 billion for this program.
Application cycle: Applications are accepted on a rolling basis.
- Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.
- Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.
- Loan guarantees must assist businesses located in a city or town with a population of fewer than 50,000 people.
- The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area.
- The lender may be located anywhere in the United States.
Who can tell me more?
Contact your USDA State or Area Office for guidance related to your specific needs.
- Applications are accepted from lenders through USDA Area Offices year-round.
- Lenders interested in participating in this program should contact the USDA Rural Development Business Programs Director in the state where the project is located.
- Interested borrowers should inquire about the program with their lender.