USDA Loans
USDA (U.S. Department of Agriculture) commercial loans are designed to help businesses in rural areas gain access to financing. These loans are part of the USDA’s Business and Industry (B&I) Loan Guarantee Program, which promotes economic development and job creation in rural regions. Here’s a general overview of USDA commercial loans:
USDA Loan Highlights
| Loan Amounts | Maximum loan amount of $25,000,000. Government guarantees up to 80% for all loans. |
| Eligibility | Businesses located in rural areas (population of 50,000 or less), including individuals, partnerships, corporations, and nonprofits. |
| Interest Rates | Negotiated between borrower and lender, with USDA guidelines. Competitive due to government backing. |
| Loan Terms | Up to 30 years for real estate, 15 years for equipment, and 7 years for working capital. |
| Loan Uses | Business expansion, purchase of land/buildings/equipment, working capital, debt refinancing, startup support, and business acquisition. |
Types of USDA Loans
| Business & Industry (B&I) Loan Guarantees | The primary program, offering loan guarantees to lenders for rural businesses to reduce their lending risk. |
| Rural Energy for America Program (REAP) | Provides loans for renewable energy projects and energy efficiency improvements for rural businesses and agricultural producers. |
| Community Facilities Direct Loan & Grant Program | Finances essential community facilities like healthcare centers, schools, or fire stations in rural areas. |