OneRD Guarantee Loan Initiative: Business and Industry (B&I) Loan Guarantees - FY 2024
Agency: | U.S. Department of Agriculture |
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CFDA: | 10.768 |
Office: | Rural Development (RD) Rural Business-Cooperative Service |
Multipart Grant: | No |
Next Due: | Rolling |
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Solicitation Date: | Rolling |
Match Required: | No |
Actual Funds: | Unspecified |
Summary:
The purpose of this program is to improve the economic health of rural communities by increasing access to business capital through loan guarantees that enable commercial lenders to provide more affordable financing for businesses in rural areas. For the purposes of this program, rural areas are defined as areas other than cities or towns with a population of greater than 50,000.
Eligible project costs may include:
- Business conversion, enlargement, repair, modernization, or development
- Purchase and development of land, buildings, and associated infrastructure for commercial or industrial properties
- Purchase and installation of machinery and equipment, supplies, or inventory
- Debt refinancing when such refinancing improves cash flow and creates jobs
- Business and industrial acquisitions when the loan will maintain business operations and create or save jobs
The following types of projects will receive priority in the application evaluation process:
- Industries that are not already present in the local community
- Businesses with at least 20 percent of their sales in international markets
- Businesses that are locally owned and managed
- Businesses that will provide a natural resource value-added product
- Businesses that process, distribute, aggregate, store, and/or market locally or regionally produced agricultural food products to underserved communities
- Businesses that create or save at least five jobs with an average wage exceeding 150 percent of the federal minimum wage
- Businesses that offer a health care benefits package to all employees and pay at least 50 percent of the health care premium
Eligibility Notes:
Eligible applicants are lenders with the legal authority, sufficient experience, and financial strength to operate successful lending programs. This includes lenders that are subject to supervision and credit examination by the applicable agency of the United States or a state, including:
- Federal- or state-chartered banks
- Savings and loans
- Farm credit banks with direct lending authority
- Credit unions
Lenders may request guarantees for the following borrowers:
- For-profit businesses
- Nonprofit organizations
- Cooperatives
- Federally recognized tribes
- Public bodies
- Individuals engaged or proposing to engage in a business
The following are not eligible borrowers:
- Churches and church-controlled organizations
- Fraternal organizations
- Lending, investment, and insurance companies
Eligibility is limited to projects located in rural areas, which for the purposes of this program are defined as areas other than cities or towns with a population of greater than 50,000. Borrowers' headquarters may be based within a larger city as long as the project is located in a rural area. Lenders may be located anywhere. Area eligibility can be determined online at eligibility.sc.egov.usda.gov.
Projects that primarily serve unincorporated areas or cities that have populations under 25,000 will receive priority points in the application evaluation process.
Previous award recipients include:
- Double D Group LLC (KY)
- JR Meat Company LLC (MO)
- Sayak Logistics LLC (AK)
- The Collins Investment Trust LLC (OK)
- Indian River Sustainability Center LLC (FL)
Refer to the Award file for additional information regarding previous award recipients.
Eligible Applicants:
Native American TribeNon Profits
Private Sector
Application Notes:
Prior to submitting an application, applicants must contact the appropriate state business programs director listed online at www.rd.usda.gov/page/state-offices.
Applications are accepted on a rolling basis.
Regulated lenders must email applications to the appropriate local state office listed online at www.rd.usda.gov/browse-state. Non-regulated lenders must email applications to the appropriate address provided in the Contact section.
Regulated lender applications must include:
- Applications for loan guarantee form
- Lender's agreement form
Non-regulated lender applications must include the introductory cover letter. Additional application components will be provided upon submission of the cover letter.
Applications will be evaluated according to criteria in the following categories:
- Population priority
- Location priority
- Guaranteed loan features
- High-impact business development investment priorities
- Administrative priorities
Refer to pages 250-253 of the FinalRule file for additional information regarding application evaluation criteria.
Refer to the NOFA and FinalRule files and the Application folder for additional application information.
Match Required: | No |
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Actual Funds: | Unspecified |
Match Notes:
There are no stated matching requirements for this program.
Loan fees will apply as follows:
- Initial guarantee fee: 3 percent of the guaranteed amount
- Periodic guarantee retention fee: 0.55 percent of the guaranteed portion of the outstanding principal balance
- Issuance of loan note guarantee prior to construction completion fee: 0.5 percent
Reduced loan fees may also apply as follows:
- Initial guarantee fee: 1 percent of the guaranteed amount
- Periodic guarantee retention fee: 0.5 percent of the guaranteed portion of the outstanding principal balance
- Issuance of loan note guarantee prior to construction completion fee: 0.5 percent
Refer to pages 3-4 of the NOFA file for additional information regarding fees, including for projects in high-cost, isolated rural areas of the state of Alaska that are not connected to a road system.
Reasonable and customary fees for loan origination are negotiated between the borrower and lender.
Borrowers must provide collateral with documented value sufficient to protect the interests of the lender and of the funding agency. Discounted collateral value will normally be at least equal to the loan amount. Collateral will be discounted by the lender consistent with a sound loan-to-value policy.
Lenders will conduct a credit evaluation using credit documentation procedures and underwriting processes that are consistent with generally accepted prudent lending practices and also consistent with the lender’s own policies, procedures, and lending practices, as detailed on pages 7-8 of the NOFA file.
Funding Notes:
An unspecified amount of funding is available to support guarantees of loans obtained through private lenders through this program. The loan guarantee percentage is 80 percent. The maximum loan amount is generally $25 million; however, the funding agency may award loans of up to $40 million for rural cooperatives that process value-added agricultural commodities.
Interest rates are negotiated between the lender and borrower. Rates may be fixed or variable; however, variable interest rates may not be adjusted more often than quarterly.
The loan term is limited to 40 years.
Funds may not be used for:
- Lines of credit
- Owner-occupied and rental housing
- Golf courses or golf course infrastructure
- Racetracks or gambling facilities
- Agricultural production, with certain exceptions detailed on page 8 of the NOFA file
- Distribution or payment to a beneficiary of the borrower, or an individual or entity that will retain an ownership interest in the borrower
- Timeshares, residential trailer parks, apartments, duplexes, or other residential housing where the primary purpose is independent housing, or housing development sites
- Projects eligible for funding under B&I that are in excess of $1 million that meet the criteria on page 168 of the FinalRule file
Refer to pages 164-166 and 175-176 of the FinalRule file for additional information regarding ineligible costs.
For FY 2023, two loans of $614,226 and $12,810,490 were provided through this program. In May 2022, loans ranging from $180,000 to $25 million were provided. In February 2022, loans totaling $1,151,281,875 were provided. Refer to the Award file for details.
Contacts:
Program Staff
OneRDGuarantee@usda.gov
Agency Address
U.S. Department of Agriculture (USDA) Rural Development
Rural Business-Cooperative Service
1400 Independence Ave., SW
Rm. 5803-S, STOP 3201
Washington, D.C. 20250-3201
Contact Notes:
Questions should be directed to the program staff, or to the appropriate state business programs director listed online at www.rd.usda.gov/page/state-offices.
Regulated lenders must email applications to the appropriate local state office listed online at www.rd.usda.gov/browse-state. Non-regulated lenders must email applications to OneRDlenderapproval@usda.gov.
The agency address provided is for reference purposes only.
Files:
NOFA File: US6629_NOFA_FY2024.pdf (232.1 Kb)Application File: US6629_Application_FY2024.zip (5.8 Mb)
Other Pre-Award File: US6629_LenderGuide_FY2024.pdf (928.2 Kb)
Other Pre-Award File: US6629_FAQ_FY2024.pdf (164.1 Kb)
Other Pre-Award File: US6629_AnnualNotice_FY2024.pdf (176.5 Kb)
Other Pre-Award File: US6629_FinalRule_FY2024.pdf (1.3 Mb)
Other Pre-Award File: US6629_FactSheet_FY2024.pdf (1.8 Mb)
Award File: US6629_Award_FY2024.pdf (1.4 Mb)
File Notes:
The NOFA file contains detailed program information and application guidelines. The Application folder contains the required forms for submission. The LenderGuide file contains additional program information and application guidelines. The FAQ file contains a list of answers to frequently asked questions regarding this program. The AnnualNotice file contains an announcement of this program's solicitation. The FinalRule file contains the final rule for this program. The FactSheet file contains an overview of this program. The Award file contains information on previous award recipients through this program.
Project: | Application for Loan Guarantee (14.5 Mb) |
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Applicant: | Lone Butte Industrial Development Corporation |
Summary: |
The purpose of this program is to improve the economic health of rural and marginal communities by increasing access to business capital through loan guarantees that enable commercial lenders to provide more affordable financing for businesses in rural areas. Lone Butte Industrial Development Corporation requested guarantees for four loans which were borrowed from creditors consisting of corporations and Native American tribes. The guarantee was requested to support expansion and job creation efforts. |
Grant Keywords
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AgricultureCommunity Development
Economic Development
Rural Issues