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| POLICY: |
- Promote projects that will result in a sustainable increase in the productivity of economic resources in rural areas thereby leading to a higher level of income for rural citizens
- RUS borrowers promote economic development in rural areas and job creation projects that (1) are based on sound economic and financial analysies and (2) take a long-term perspective
- Encourage economic development in rural areas and job creation projects without
- Promote financially viable projects
- Encourage RUS borrowers to deposit funds in Cushion-of-Credit accounts
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ELIGIBILITY:
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- Any Rural Utility Service electric or telephone
borrower, including prepaid borrowers, not delinquent on any Federal debt or in bankruptcy proceedings
- Supplemental funding (20% of the amount of the 0% interest loan or grant) is required. It may be provided by the project owner in the form of equity funds, private sources, state and local government sources, other Federal Government sources, the RUS borrower, etc.
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ELIGIBLE
LOAN
PURPOSES:
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Variety of projects which will promote rural economic development and/or job creation. Examples include:- Business expansion and start-up
- Community development
- Business Incubator projects
- Medical and educational projects
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INELIGIBLE
LOAN
PURPOSES:
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- Project in which any director, officer, manager or stockholder or relative thereof, who has a significant ownership interest or which would present a potential for, or appearance of, a conflict of interest
- Costs incurred, and not authorized, prior to receipt of completed application
- Purchase or lease of any real property materials, equipment, or services from the borrower, stockholders, officers, managers, or close relatives without prior approval
- Refinancing any debt incurred prior to receipt of application
- For the Borrower's electric or telephone operation or for any electric or telephone purpose
- Any operation affiliated with the borrower without prior approval
- Salaries of employee or owner of the borrower or affiliates
- Community antenna television systems or facilities unless in conjunction with educational or medical entities and projects
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TERMS:
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- Maximum size of loan: $740,000 (Changes Annually)
- Minimum size of loan: $ 10,000
- Promissory note for repayment is between USDA Rural Development and the RUS borrower
- Repayment terms are based on the nature of the project but usually will not exceed 10 years. Repayment by the recipient must equal the terms to the RUS borrower
- Principal repayments may be deferred for two years. The repayment for an established business will normally be limited to one year
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APPLICATIONS:
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Applications may be filed at any time, but are submitted to the National Office quarterly.
Applications are prepared jointly by the borrower and the ultimate recipient applicant and
are filed by the borrower. The application consists of:-
SF Form 424, Application for Federal Assistance
- Board Resolution
- Miscellaneous Federal forms and certifications such as:
- AD-1047, Certification Regarding Debarment, Suspension and Other Responsibility Matters
- Assurance statement or certification statement regarding uniform relocation assistance
- Contingent certifications and disclosures such as the Certification Regarding Lobbying
The following factors will be considered in the selection process:-
Narrative discussion of selection factors, project description and discussion of the environmental impact of the proposed project.
- Nature of project
- Job creation projections
- Supplemental funds
- Economic conditions and job creation
- Unemployment rates
- Per Capita personal income
- Change in population
- Number of long-term jobs
- Rural location
- Support for the program - funds deposited in the cushion-of-credit account
- Probability of success
- Special economic status of project location/community
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