Introduction

Rural Development administers Rural Business Enterprise Grants (RBEG) to finance and facilitate development of small and emerging private business enterprises in rural areas or cities up to 50,000 population with priority to applications for projects in open country, rural communities and towns of 25,000 and smaller and economically distressed communities.  RBEG includes grants made to third-party lenders to establish revolving loan programs.

Who is Eligible?

Eligibility is limited to public bodies and private nonprofit corporations.  Public bodies include: incorporated towns and villages, boroughs, townships, counties, states, authorities, districts, and Indian tribes on Federal and State reservations and other federally recognized Indian tribal groups in rural areas.

How Funds May be Used?

Funds may be used to finance and develop small and emerging private business enterprises.  Small and emerging private business enterprises are defined as businesses with less than $1 million in gross revenue; less than 50 new jobs being created as a result of the project; and a business that has or will utilize technological innovations and commercialization of new products that can be produced or manufactured in a rural area.

Costs that may be paid from grant funds include the acquisition and development of land, and the construction of buildings, plans, equipment, access streets and roads, parking areas, utility and service extensions, refinancing fees, technical assistance, startup operating cash and working capital.

Limitations

Grants may not be used for:

• Production of agricultural products through growing, cultivating, and harvesting either directly or through horizontally integrated livestock operations except for commercial nurseries or timber operations.

• Comprehensive area type planning.

• Loans by grantees when the rates, terms and charges for those loans are not reasonable.

• Development of a proposal that may result in the transfer of jobs or business activity from one area to another.  This provision does not prohibit establishment of a new branch or subsidiary.

• Development of a proposal which may result in an increase of goods, materials, commodities, services, or facilities in an area when there is not sufficient demand.

Applications will be considered without regard to race, color, religion, sex, national origin, age, marital status, or physical or mental handicap (provided applicants have the capacity to enter into a legal contract of the members of the groups applying for assistance).  Opportunity to construct, develop and use the facilities must be extended on the same basis.

Rural Business Enterprise Grants (RBEG) and

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