PROGRAM DESCRIPTION: Loan guarantees only. The lender pays Rural Development a fee of two percent of the amount of the loan guaranteed.
TYPE OF ASSISTANCE: Loans may be for purchase of land, buildings, equipment and permanent working capital. Refinancing debts may also be eligible. Most types of businesses are eligible including recreational projects, hotels and motels, and agriculture production when part of an integrated operation.
MAXIMUM AMOUNTS: Generally the maximum amount of a loan approvable at the State level is $5,000,000 and up to $15,000,000 at the National Office. The Secretary can approve up to $25,000,000.
ELIGIBILITY REQUIREMENTS: Loans are made to most all types of legal entities and individuals involved in business that employ people in rural areas (under 50,000 in population).
INTEREST RATE AND TERMS: Interest rates are negotiated between the lender and borrower and may be fixed or variable. The term may be up to seven years for working capital; useful life of equipment not to exceed fifteen years; and up to thirty years on real estate.
OTHER: Collateral will be considered along with the company history, management, repayment ability, equity, etc. A minimum of ten percent tangible balance sheet equity for existing businesses and twenty percent for new businesses is required.
CONTACT: Interested lenders may contact any Rural Development Area Office.
For assistance, please contact Business Programs at 919-873-2040.
Please send any comments or suggestions to:
Revised on: August 2011