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LOAN DETAILS

The purpose of the Business & Industrial (B&I) Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits.

General Program Requirements

A borrower may be:
An individual
A cooperative organization, corporation, partnership, or other legal entity organized and operated on a profit or nonprofit basis
An Indian tribe on a Federal or state reservation or other Federally recognized tribal group, or
A public body.

A borrower must be engaged in or proposing to engage in a business that will:

Provide employment
Improve the economic or environmental climate
Promote the conservation, development, and use of water for aquaculture, or
Reduce reliance on nonrenewable energy resources by encouraging the development and construction of renewable energy systems.
Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence. Corporations or other non-public body organization-type borrowers must be at least 51 percent owned by persons who are either citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence. B&I loans are normally available in rural areas.

Loan Terms
The interest rate for the guaranteed loan will be negotiated between the lender and the applicant and may be either fixed or variable as long as it is a legal rate. Interest rates are subject to Agency review and approval. The variable interest rate may be adjusted at different intervals during the term of the loan, but the adjustments may not be more often than quarterly.

The annual renewal fee is paid once a year and is required to maintain the enforceability of the guarantee as to the lender. There is also an up front guarantee fee of two percent. A limited amount of loans may be guaranteed with a one percent fee, subject to meeting regulatory requirements.

The maximum repayment for loans on real estate will not exceed 30 years; machinery and equipment repayment will not exceed the useful life of the machinery and equipment purchased with loan funds or 15 years, whichever is less; and working capital repayment will not exceed seven years.

The total amount of Agency loans to one borrower must not exceed $10 million. The Administrator may, at the Administrator's discretion, grant an exception to the $10 million limit for loans of $25 million under certain circumstances. The Secretary may approve guaranteed loans in excess of $25 million, up to $40 million, for rural cooperative organizations that process value-added agricultural commodities.

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U.S. Department of Agriculture
The U.S. Department of Agriculture (USDA) is committed to helping improve the economy and quality of life in all of rural America. The loan programs offered by USDA's Farm Service Agency (FSA) and Rural Development (RD) mission area assist farmers, ranchers, rural individuals, communities and businesses obtain the financial and technical assistance needed for their diverse and unique needs. FSA's loan programs are designed to improve and stabilize farm income by helping farmers market their crops. FSA also makes and guarantees loans to farmers and ranchers who cannot qualify for conventional loans because they have insufficient financial resources or have suffered financial setbacks from natural disasters. RD's loan programs support such essential public facilities and services as water and sewer systems, housing, health clinics, and emergency service facilities.

U.S. Department of Commerce
The mission of the Department of Commerce is to create the conditions for economic growth and opportunity by promoting innovation, entrepreneurship, competitiveness, and stewardship. The Department of Commerce administers several financial assistance programs for United States commercial fishermen and other eligible citizens and entities.

U.S. Department of Education
The U.S. Department of Education's Federal Student Aid (FSA) office provides loans and other types of financial aid to students and parents. FSA's programs are the largest source of student aid in America, providing nearly 70 percent of all student financial aid. Help is available to make education beyond high school financially possible for you or your child.

U.S. Department of Housing and Urban Development
The U.S. Department of Housing and Urban Development (HUD) insures mortgage loans to help people buy or refinance their current homes with a low down payment. HUD does not give you the loan directly. You will need to go to a local HUD-approved lender, who will help you find out if one of HUD's programs is right for you.

U.S. Department of Veterans Affairs
The U.S. Department of Veterans Affairs (VA) provides federal benefits to veterans and their dependents. VA is the second largest of the 15 Cabinet departments and operates nationwide programs for health care, financial assistance and burial benefits. Of the 26 million veterans currently alive, nearly three-quarters served during a war or an official period of conflict. About a quarter of the nation's population, approximately 70 million people, are potentially eligible for VA benefits and services because they are veterans, family members or survivors of veterans.

U.S. Small Business Administration
The U.S. Small Business Administration (SBA) aids, counsels, assists, and protects the interests of small business concerns, and advocates on their behalf within the Government. It also helps victims of disasters. It provides financial assistance, contractual assistance, and business development assistance.