USDA Business & Industry (B&I) Loan Program

The USDA Business & Industry (B&I) Loan Program is a government-backed loan designed to help rural businesses grow, expand, and create jobs. This program provides loan guarantees to lenders, making it easier for businesses in rural areas to access financing for various business purposes, including real estate purchases, working capital, equipment, and debt refinancing.

The B&I program is offered by the U.S. Department of Agriculture (USDA) and is available to businesses located in rural areas with populations of 50,000 or less.

Who Can Benefit from a USDA B&I Loan?

✅ For-Profit Businesses – Small and large businesses in rural areas.
✅ Nonprofits & Cooperatives – Including rural electric, water, and healthcare cooperatives.
✅ Tribal Entities – Federally recognized tribal organizations.
✅ Public Entities – Towns, communities, and economic development groups.
✅ Agribusinesses & Farmers – If the project involves value-added processing (e.g., food manufacturing).

Key Features of the USDA B&I Loan

✔ Loan Amounts Up to $25 Million – Can finance large projects.
✔ Government-Backed Loan Guarantee – Covers 80% of loans up to $5 million, 70% for $5-$10 million, and 60% for $10-$25 million.
✔ Available for a Wide Range of Business Uses – Real estate, equipment, debt refinancing, and working capital.
✔ Long Repayment Terms –

• Real estate: Up to 30 years
• Machinery & Equipment: Up to 15 years
• Working Capital: Up to 7 years
  ✔ Competitive Interest Rates – Typically negotiated with the lender.
  ✔ Low Down Payment – Generally 10-20% depending on the lender.

Eligible Uses for USDA B&I Loan

✅ Business Real Estate Purchases – Buying, developing, or renovating facilities.
✅ Machinery & Equipment Purchases – Long-term assets that improve operations.
✅ Working Capital & Business Expansion – Growth, hiring, and operational costs.
✅ Debt Refinancing – If it improves cash flow and strengthens the business.
✅ Business Acquisitions – Buying an existing business to sustain or expand operations.
✅ Energy & Renewable Projects – Wind, solar, and bioenergy development.

🚫 Not Allowed for:
❌ Businesses in urban areas with populations over 50,000.
❌ Passive real estate investment or purely residential projects.
❌ Golf courses, gambling facilities, and religious institutions.
❌ Lines of credit or speculative investments.

Typical Requirements for a USDA B&I Loan

📌 Business Must Be Located in a Rural Area – Population must be 50,000 or less.
📌 Good Credit & Strong Financials – Business must demonstrate profitability and repayment ability.
📌 Adequate Collateral – Real estate, equipment, or business assets may be required.
📌 Debt-to-Worth Ratio – Typically 4:1 or lower for most businesses.
📌 Personal/Business Guarantees – Owners with 20%+ ownership usually need to personally guarantee the loan.