The Business and Industry (B&I) Guaranteed Loan Program is a loan guarantee program designed to assist credit-worthy rural businesses obtain needed credit for most any legal business purpose. The intent of this program is to save and create jobs in rural America.
How can loan funds be used? Eligible uses include, but are not limited to:
Business conversion, enlargement, repair, modernization or development
The purchase and development of land, buildings and associated infrastructure for commercial or industrial properties
- The purchase and installation of machinery and equipment, supplies or inventory
- Debt refinancing when such refinancing improves cash fow and creates jobs
- Business and industrial acquisitions when the loan will maintain business operations and create or save jobs
What can loan funds NOT be used for?
What is considered an eligible area?
What type of businesses qualify for these type loans?
How are B&I Guaranteed Loans different from SBA 7(a) loans?
The B&I Guaranteed Loan programs and SBA 7(a) loans are similar in that a loan guarantee is provided, but the programs operate independently. The B&I program is specifically targeted to rural businesses. Rural Development has an extensive field structure of State and Area Offices that work closely with lenders in processing and servicing B&I loans. The lender and borrower work with a specific loan specialist in their State throughout the entire loan process. Other differences include a different fee structure and loan limits.
What are the benefits to the B&I loan program?
Borrowers can benefit from better pricing and terms with the B&I loan guarantee in place than are typically given with conventional loans. The loans must be fully amortized, without calls or balloon repayment structures. Longer terms can reduce additional loan fees that may be incurred in the future on shorter term loans or balloon loans. The interest rates for the loans are negotiated between the lender and the applicant and may be either fixed or variable (or a combination of fixed and variable).
What are the business restrictions?
Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence
Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents