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What is a Business & Industry Loan and Does Your Business Qualify?

Written by: Kristy Welsh

Last Updated: August 1, 2017

If your business is located in a rural community, you may qualify for a special type of loan. The U.S. Department of Agriculture (USDA) maintains a Business and Industry (B&I) Guaranteed Loan Program. The USDA provides guarantees of up to 80 percent of a loan made by a commercial lender.

The Rural Business-Cooperative Service (RBS) is one of three agencies within USDA responsible for administering various economic development programs to rural communities in the United States. Because these three agencies are closely aligned, they are commonly referred to as the USDA Rural Development, Business & Cooperative Programs.

The mission of the RBS is "to enhance the quality of life for rural Americans by providing leadership in building competitive businesses including sustainable cooperatives that can prosper in the global marketplace."

They meet these goals by:

In addition to supporting rural business, economic, and cooperative development, the Agency has become increasingly involved in renewable energy and value-added agriculture since the enactment of the 2002 Farm Bill. Here are the guidelines set by the Rural Business Cooperative Service (RBS) to determine whether your business is considered an eligible small business for a Business & Industry (B & I) loan.

How is Rural Area Determined?

Normally, projects seeking a B&I guaranteed loan need to be located in eligible rural areas, which include all areas other than cities or towns larger than 50,000 people and the contiguous and adjacent urbanized area of such cities or towns.

Impact on Local Jobs

RBS begins determining eligibility for a B & I loan based on your loan request’s impact on jobs in the rural community. RBS priorities are, in order from highest to lowest, as follows:

Quality of Loan

RBS looks for quality loans that will support a stable employment source. The factors that RBS reviews to determine loan quality include:

Use of Proceeds from a B&I Loan

This loan can be used for:

Your B & I loan request will be considered ineligible if you intend to use proceeds to:

Business Type

If your business falls within one of the following categories, it is ineligible for a B & I loan.

Like all SBA loans, you will need to go to through your local bank or financial institution to apply for a B&I loan. If you have any questions, go to the website.

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