USDA IMPROVES RURAL LOAN PROGRAM; MORE FUNDS GOING TO LOW-INCOME AREAS
WASHINGTON, February 6, 1998 -- Agriculture Secretary Dan Glickman today launched a new program to stimulate new or expanded businesses and community development projects in rural America.
"The Intermediary Relending Program (IRP) makes investment capital available to businesses which cannot obtain financing from conventional sources," said Glickman. "Under our revisions to the program, we will be able to target more funding to our neediest rural communities, such as those in low-income or under-served areas or those with declining populations."
Under this program, funds are lent to intermediaries -- including private nonprofit corporations, public agencies, Native American groups and cooperatives -- which then provide loans to local borrowers. In addition to financing rural business and industry, the IRP is intended to create jobs and promote economic diversity in rural areas.
"The IRP regulation was completely rewritten, consistent with Vice President Gore's initiative to make government work better and cost less," said Jill Long Thompson, under secretary for USDA Rural Development. "It was streamlined and written in customer-friendly language. These changes will make it much easier for people to understand how the IRP works."
Intermediaries initially may receive loans up to $2 million and, in some cases, may receive up to $1 million per year in subsequent loans. Total loan debt is capped at $15 million.
The new IRP regulation authorizes USDA Rural Development state offices, rather than the national office, to process IRP applications. This will speed the application process and allow states to work closer with borrowers and provide immediate feedback concerning their applications.
Last year, over $37 million in IRP funding helped improve economic conditions in rural communities. On average, each $100,000 of IRP money loaned by an intermediary provides employment opportunities for approximately 20-25 people. It is projected that last year's loans will create or save around 9,300 jobs.
The new regulation appears in today's Federal Register and goes into effect immediately.
Contacts:
Laura Trivers, (202) 720-4623
Dan Campbell, (202) 720-6483