Dec 29, 2021
As businesses in the United States are still recovering from the Covid-19 pandemic, many of them are looking for options to bring their business back on track and re-energize their business operations for future growth. One such option is USDA rural development loan.
At times when rural businesses have limited cash on hand and are more financially fragile from a cash flow perspective, the USDA’s Rural Development Business and Industry(B&I) Program has been gaining popularity as it is continuously proving to strengthen rural businesses and helping them maximize their potential for future success.
Also known as the “One RD Guaranteed Loan Initiative”, this USDA-backed loan allows lenders to provide collateral-backed commercial loans to businesses that are creditworthy. As a result, rural businesses are getting the needed capital they need to flourish and create rural job opportunities, which will also help improve the overall economy of that rural area further.
While the USDA offers a variety of loans, the most popular and largest one is USDA’s rural development business and industry loan.
In the beginning, you may not think that the USDA rural development loan can be a good option for you because you might not know what qualifies as a “rural” business.
According to the definition provided by the USDA, any town or city that inhabits 50,000 or fewer residents are considered rural.
To the surprise of many, 97percent of all American towns are considered rural as they fulfill this criterion. Many business owners and entrepreneurs are often shocked to see that they reside and run their business in a qualifying area.
What’s interesting, even a lot of businesses headquartered in larger, non-rural metropolitan areas are also eligible to obtain USDA rural development loans to collect funds for their branches, franchises, or divisions located in qualifying rural communities.
So, when it comes to obtaining a business loan, don’t forget to ask your loan agent whether your business can qualify for USDA rural development loan or not.
My business doesn’t involve agricultural activities but it is located in a rural community. Can I apply for USDA Rural Development Loan for Business?
In areas with moderately-sized populations in the United States, USDA rural development loans are not restricted to agricultural businesses. USDA rural development loans can be obtained by non-agricultural businesses, for-profit and non-profit businesses, individual entrepreneurs, partnerships, and cooperatives, public traded companies, franchises, federally recognized Native American tribes, and some agricultural producers who don’t qualify to obtain USDA Farm Service Agency Loans. Please reach out to us and we’ll help answer your questions.
Many businesses in rural areas are finding it hard to access business capital because of the risks that commercial lenders are exposed to. Covid-19 public health crisis only multiplied these risks for commercial lender. Since the rise of the Covid-19pandemic, businesses suffered massive negative impacts and many were forced to temporarily close, cut expenses, and/or forced to declare bankruptcy.
Others, who were able to survive, are now feeling defeated due to the long duration of the pandemic as their resiliency and tenacity is being tested. Fortunately, USDA rural development loans offer great relief as they come with various benefits including appealing rates, terms, and loan amounts.
Hence, USDA rural development loans are nothing less than the lifeline for many rural businesses that have been struggling in the post-pandemic world.