The U.S. Department of Agriculture Rural Development agency's Business & Industry (B&I) Loan Guarantee Program has more than $50 million in Recovery Act and fiscal year 2010 funding to
support New York Business.
The funding expires on September 30, but time is critical and interested parties are urged to apply as soon as possible.
Purpose and Benefits
The B&I program's purpose is to create jobs while promoting private investment and economic development in rural areas. In the program, a
private lender serves as USDA's "customer," making the loan to the business.
Lenders use their own documents, security instruments and commercial
underwriting requirements on the loans. USDA, in return, guarantees a large
portion of the loan. This guarantee is equivalent to a federally-backed
security and provides a strong incentive for lenders' to make loans and
provide better rates and terms to borrowers. The guarantee also means
businesses have a better chance of getting the financing and terms they
need.
Eligibility
Businesses must be located in areas of less than 50,000 to meet rural
eligibility requirements. Applicants can be individuals, partnerships,
federally-recognized Indian Tribes, corporations, cooperative trusts or
other legal entity. Individuals and a majority of the owners must be U.S.
citizens or permanent legal residents.
Eligible Loan Purposes
Loan funds can be used for land, machinery and equipment purchases,
pollution control and abatement, working capital, business and industrial
acquisitions, construction, enlargement, or modernization and refinancing
when necessary to save jobs. The program can support most legal businesses
but farms, golf courses and gambling establishments are ineligible.
Loan Limits and Guidelines
The maximum loan limit is $25 million for individual businesses and $40
million for cooperative organizations. USDA Rural Development's state office
can approve loans up to $10 million. Loans in excess of $10 million must be
sent to Rural Development's national office for approval.
With Recovery Act funding, USDA can guarantee up to 90 percent of a loan -
80 percent is normally the maximum guarantee. The one-time guarantee fee -
normally 2 percent - is reduced to 1 percent and the annual renewal fee also
is waived for loans made with Recovery Act funding.
The First Step
Recovery Act and fiscal year funding expire September 30, but time is crucial. Interested parties should apply as soon as possible. Those who do not qualify under Recovery Act funds may still qualify under the regular B&I Program. For more information on the process, call the Rural Development's New York state office at 315-477-6400. For further details about eligibility rules and application procedures visit www.rurdev.usda.gov/ny
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