USDA Business & Industry Loan Programs

USDA Business & Industry Loan Programs (B&I)

The USDA Business and Industry (B&I) Guaranteed Loan Program is designed to assist rural businesses in communities of 50,000 or less obtain credit for most any legal business purpose. A borrower may be a corporation, partnership, individual, cooperative organization or other legal entity organized and operated on a profit or non profit basis. Individual borrowers must be citizens of the United States and corporations must be 51% owned by persons who are citizens of the United States.

Loan Purpose

  • Business and Real Estate acquisitions, construction, conversion, expansion, repair, modernization or development.
  • Purchase of equipment, machinery, or inventory.
  • Start-up costs and working capital.
  • Refinancing for viable projects.

Equity Requirements

For existing businesses, a minimum of ten percent (10%) tangible balance sheet equity is required at the time of issuing the loan note guarantee. For new businesses, twenty percent (20%) tangible balance sheet equity is required. Equity is calculated in accordance with general accepted accounting principles (GAAP).


All principals who own 20% or more of the business are required to provide a full guarantee.  The guarantee of affiliated companies may be required based on the percentage of ownership of the affiliate and the borrower’s relationship with the affiliate.

Ineligible Industries

  • Investment(s) in speculative real estate
  • Golf courses or similar recreational facilities
  • Gambling activities
  • Prostitution or activities of a prurient sexual nature
  • Finders, packagers, or loan brokers
  • Illegal drugs or drug paraphernalia
  • Any project likely to result in the transfer of employment from one area to another
  • Any project involving transfer of ownership, unless this will keep the business from closing, prevent the loss of jobs in an area or provide more jobs
  • Paying off a creditor in excess of the value of the collateral
  • Payment to owners, partners, shareholders or others who retain any ownership in the business
  • Corporations and businesses not at least 51% owned and controlled by U. S. citizens
  • Charitable and educational institutions, religious organization and affiliated entities and fraternal organizations
  • Lines of Credit
  • Financing agricultural production unless the business is also processing agricultural products

Benefits to Businesses

  • Higher loan amounts
  • Less equity injection, lower interest rates and longer repayment terms assist businesses that may not qualify for conventional lender financing
  • Assist a business in providing stability, growth, expansion, and rural employment