FL/VI Rural Business-Cooperative Service
INTERMEDIARY RELENDING PROGRAM

Experienced relending organizations in the state of Florida and the Virgin Islands can obtain loans from the United States Department of Agriculture (USDA) to help rural entrepreneurs and towns to create new businesses, expand existing businesses, and develop community projects.

These loans are offered at very low interest rates to experienced, non-profit intermediary relending organizations through USDA’s Rural Development program.

Rural Development Intermediary Relending Program is designed to help small businesses and communities which need credit but have not been able to obtain it through traditional financing programs. Rural Development supports these businesses and communities by providing very low interest loans to established non-profit, community-based organizations whose mission includes the economic development of rural areas of Florida and the Virgin Islands. These non-profit organizations then relend Rural Development funds at below market interest rates to business owners and community project directors in need of credit.

The relending organizations also service the loan, by providing all technical assistance necessary to help insure that the business or community development venture succeeds. Guidance is provided in such areas as business planning, personnel administration, accounting, marketing, and sales promotion.

The overall purpose of Rural Development’s Intermediary Relending Program is to help community-based relending organizations to stimulate the economy and create additional jobs in rural areas located outside the boundaries of Florida cities with a population of 25, 000 or more.

The intermediary organizations establish revolving loan funds, so that collections from loans made to recipients (in excess of necessary operating expenses and debt payments) can be used for more loans to additional recipients.

Loans from intermediary organizations to business owners and community project managers must be used to establish new businesses, expand existing businesses, create employment opportunities, save existing jobs, or develop community projects. Loans made for these purposes are limited to $150,000.

Intermediary organizations eligible to borrow money from Rural Development include: all private non-profit corporations, public agencies, Indian groups, and cooperatives in rural areas of Florida.

Approval to receive Rural Development loan funds is granted to intermediary relending organizations which:

• have experience in successfully providing commercial loans to rural business and industry;
• have experience in servicing commercial loans and providing the required technical assistance to loan recipients;
• are bonded;
• have the legal authority to carry out the proposed loan purposes;
• have the legal authority to incur the debt and repay the debt to Rural Development; and
• can adequately assure loan repayment

Since the ultimate goal of this program is to increase economic vitality and employment in rural areas in Florida and the Virgin Islands, few restrictions are placed on the type of business which can seek credit from an intermediary relending organization. Any legal enterprise consisting of individuals and/or public and private organizations may receive low interest rate loans from an intermediary relending institution. Those who receive funds can be engaged in virtually any business. Loans have been made to local recipients for such wide ranging ventures as home-based businesses, restaurants, repair facilities, light manufacturing operations and agriculture processing plants.

At least 51 percent of the owners or members of both the intermediary relending organization and the business owners and project managers to who they relend Rural Development funds must be United States citizens or be admitted for permanent residence in this country.

Both the intermediary relending organization and the business loan recipients must be unable to obtain the proposed funds elsewhere at reasonable rates and terms.

All Intermediary Relending Program Loan funds received by an intermediary organization must be reloaned to subsequent recipients. Interest income and fees may be used for administrative costs, technical assistance to borrowers, or debt

retirement. Collections for the operation of the loan funds not used for these stated expenses must be made available for relending to other eligible recipients.

Again, these funds must be used by recipients to establish new businesses, expand existing businesses, create employment opportunities, save existing jobs or development community projects.

Application should be made at the Rural Development Area Office. The Area Office staff will be glad to discuss services available from the Rural Development and explain how to prepare a written application.  To find the Area Office serving your county, click here.