We understands that and farmers play a critical role in their communities. These businesses are often the cornerstones of their communities, helping boost the economy and provide critical jobs. We appreciate the hard work your rural business does, and that's why we work with you and the US Department of Agriculture (USDA) to secure funding for your rural business. We work on your behalf to secure the money you need to grow and continue to help your community enjoy sustainable success. Using our expertise, we’ll save you time and increase your odds of approval since we identify the best options designed to get the funds you need.
USDA business loans help America’s rural communities thrive. These loans are government-backed and offer up to $25 million in capital for rural businesses and farms to use for various needs. USDA business loans especially champion job creation in small communities and are available to non-profit, for-profit, government, and tribal entities. Government backing for these loans also means that it can be easier to be approved for compared to traditional business loans.
Our mission is to help rural communities build a culture of self-sufficiency and sustainability. With this in mind, we walk you through the entire loan process.
Different USDA Loan types include:
The B&I loan program is the USDA’s flagship program targeted at creating jobs and stimulating the economy in rural communities. Eligible businesses can apply for up to $25 million in capital.
REAP offers guaranteed financing to rural businesses or agricultural producers of up to $25 million for renewable energy systems or to make energy efficiency improvements.
The FSA’s Guaranteed Farm Loan programs help farmers and ranchers obtain financing from lenders to buy farmland or finance agricultural production, offering up to $1,825,000.
The CF Loan Guarantee Program helps develop facilities that provide an essential service to their local rural community of 20,000 inhabitants or less, offering up to $100 million.
The USDA Business and Industry loan program is geared towards fostering employment in rural America. The program is not limited to farmers, farming and agricultural-related businesses; these funds may be used to develop businesses if the property is located in a rural town of <50,000 residents.
Key differences between the USDA B&I loan and SBA 7a loan programs:
Maximum Loan Size
$25 Million
$5 Million
Minimum Loan Size
$2 Million*
No Minimum, but commonly no less than $30,000
Geographic Requirements
Rural America & US Territories
No Restricted Geographic Area
Interest Rate Estimates
WSJ + 1-3%
SBA Prime Rate based Rate
Origination Fees
2%
Not Allowed
Guaranteed Portion
80% Max
85% Max
Security of Guarantee
Strong
Can Be Negotiated
Speed of Government Processing
4-12 weeks
4-6 Weeks
Collateral
1:1 Discounted
No Regulatory Requirement
Equity
10%, 20%, 25% Tangible Net Worth
No Regulatory Requirement
Interest Rates
Lender Determined
Lender Determined
Average Default Rate
3%
17%
Prepayment Penalty
10 Year Decline or Negotiated
Fixed at 5/3/1
Repayment Terms
Maximum of 30 Years
Maximum of 25 Years
Owner Occupancy
No Restrictions
Owner Required to Occupy the Property
There are two many benefits to USDA loans that make them an attractive choice compared to traditional loans.
Creditworthiness does factor into your loan interest rates, but USDA loans still have some of the lowest rates on the market.
USDA loans make it easier for rural businesses to grow thanks to flexible repayment terms. Depending on what you’re using the funds for, payment plans can range from 7 to 30 years.
A USDA loan is a business loan that is insured by the U.S. Department of Agriculture. These loans are given to qualified enterprises in rural areas through partner lenders. Despite being specifically designed for rural enterprises, USDA business loans are comparable to Small Business Administration (SBA) loans. It's a fantastic resource for long-term affordable financing for rural businesses.
The USDA ensures that the interest rate is competitive with other loans of a comparable nature. Lenders determine the interest rates for USDA business loans. Inter estrates can be either fixed or variable, or they can be both.
The USDA loan has disadvantages despite how amazing it is. The biggest ones are the financial restraints and geographic limitations. Nowhere can you use a USDA loan to buy a house. You must meet their income requirements, which take into account the income of your entire household, and you must purchase a property in an area that qualifies as rural.
SBA is nota part of USDA. The SBA 7a Loan Program and the USDA Business Loan Programs are fairly similar, and both of them can be a great option for many businesses.
10-20% down payment is generally required for USDA business loans. Also, there are closing costs. The fees and charges associated with settling a USDA business loan are included in your closing costs. Depending on where you live, you'll need to pay somewhere between 1 and 3+ per cent of the loan amount in closing costs on average.
You cannot get cashback during a USDA business loan closing. If you need a working capital product, there are other programs to secure working capital in addition to USDA loan.
We are proud to offer FSA loans, USDA BI loan or USDA B&I loan program to businesses nationwide. These USDA business loan programs are designed to help farmers, ranchers and other rural businesses with the purchase, construction, or improvement of farmland and buildings, including commercial real estate that is to be used for agribusiness or rural business purposes. Contact us today to learn more about how we can help you take advantage of these great programs.
