Rural Development Business

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Rural Development Business Cooperative Programs
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Rural Development Business Cooperative Programs

• Business Industry Guaranteed Loans
• Intermediary Relending Program
• Rural Business Opportunity Grants
• Rural Business Enterprise Grants
• Rural Economic Development Loans Grants
• Renewable Energy and Energy Efficiency Program
• Value Added Producer Grants
• Rural Cooperative Development Grants
• Cooperative Development Assistance

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BI Guaranteed LoanHow does it work?

• An authorized commercial lender makes a loan to
  the rural business
• USDA Rural Development acts a co-signer on the
  loan by guaranteeing up to 80
• Helps borrowers gain access to capital when
  lenders wouldnt otherwise make the loan
• Helps lenders by reducing their risk
• Allows lenders to lend more than their legal
  limit (the guaranteed amount doesnt count
  towards this limit)
• Banks pay a small initial fee of 2 and an annual
  fee of .25

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BI Guaranteed LoanHow can the loan proceeds be
used?

• Working capital
• Machinery and equipment
• Buildings and real estate
• Certain types of debt refinancing

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Rural Development Business and Cooperative
Programs

• Intermediary Relending Program

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Intermediary RelendingHow does it work?

• USDA Rural Development loans money to the
  intermediary
• The intermediary establishes a revolving loan
  fund and loans money from the fund to the
  ultimate recipients

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Rural Development Business and Cooperative
Programs

• Rural Business Opportunity Grants (RBOG)

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RBOGHow does it work?

• USDA Rural Development provides grant funds to
  the grantee for use in promoting sustainable
  economic development in rural communities with
  exceptional needs
• Most grants are for 50,000 or less

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RBOGHow can the funds be used?

• Identify and analyze business opportunities
• Identify and provide technical assistance
• Establish business support centers
• Conduct local community or multi-county economic
  development planning
• Establish centers for training
• Technology and trade
• Conduct leadership training
• Pay reasonable fees for Professional Services

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Rural Development Business and Cooperative
Programs

• Rural Business Enterprise Grants (RBEG)

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RBEGHow does it work?

• USDA Rural Development awards grant funds to the
  grantee for use in financing and facilitating the
  development of small and emerging businesses

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RBEGUse of funds

• The grantee can assist small and emerging
  businesses in a number of ways
• Technical Assistance to small and emerging
  businesses
• Marketing Studies
• Feasibility Studies
• Business Plans
• Training
• Purchase machinery and equipment to lease to a
  small and emerging business
• Create a revolving loan fund
• Providing partial funding as a loan to a business
  to purchase equipment, working capital or real
  estate
• Construct a building for a business incubator

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Rural Development Business and Cooperative
Programs

• Rural Economic Development Loan and Grant (REDLG)
  Programs

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REDLGHow does it work?

• USDA Rural Development provides a 0 interest
  loan or grant to an eligible rural utility for
  the establishment of a revolving loan fund
• In the case of a grant, the rural utility is
  required to contribute to the revolving loan fund
  an amount equal to 20 of the grant
• This must remain part of the fund until the fund
  is terminated
• The rural utility loans money from the revolving
  loan fund to a third-party recipient
• The third-party recipient must use the money to
  promote economic development and job creation in
  rural areas

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REDLGHow can the funds be used?

• When the rural utility receives a grant, it can
  loan the money for
• Community development projects
• Community facilities / services
• Educational facilities
• Medical facilities
• Business incubators to assist in developing
  emerging enterprises (for-profits are not
  eligible)

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REDLGHow can the funds be used?

• When the rural utility receives a loan, it can
  re-loan the money for
• Business expansions and startups
• Cost of buildings
• Equipment
• Machinery
• Land
• Site development
• Working capital
• Community infrastructure
• Community facilities / services
• Medical facilities and equipment
• Educational facilities and equipment to provide
  training and job skills
• Business incubator projects to assist in
  developing emerging enterprises

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Rural Development Business and Cooperative
Programs
Renewable Energy Systems and Energy Efficiency
Improvement Loan and Grant Program (9006)
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Section 9006How does it work?

• USDA Rural Development awards grants and / or
  guarantees loans to purchase renewable energy
  systems and make energy efficiency improvements

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Rural Development Business and Cooperative
Programs
Value Added Producer Grants (VAPG)
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Value Added Producer GrantsHow does it work?

• USDA Rural Development makes grants to enable
  producers to develop businesses that produce and
  market value-added agriculture products
• Maximum grants
• Planning Grant - 100,000
• Working Capital - 150,000