USDA to Provide $1 Billion in Loan Guarantees for Rural Businesses, Ag Producers
SAN JUAN – U.S. Secretary of Agriculture Sonny Perdue announced Thursday that the department is making available up to $1 billion in loan guarantees to help rural businesses meet working capital needs during the coronavirus pandemic.
Additionally, agricultural producers that are not eligible for USDA Farm Service Agency loans may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
USDA Rural Development provides loans and grants for infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and internet access in rural areas.
“Our Business Program Staff is working virtually to continue delivering our services and supporting our rural customers,” Puerto Rico State Director Josué E. Rivera said, adding that the “program is very important for our island rural businesses and farmers to overcome the impacts of not only the hurricanes and earthquakes but now the COVID-19.”
In addition to expanding eligibility to certain agricultural producers, the changes Perdue announced allow the USDA to:
- Provide 90 percent guarantees on B&I CARES Act Program loans;
- Set the application and guarantee fee at 2 percent of the loan;
- Accept appraisals completed within two years of the loan application date;
- Not require discounting of collateral for working capital loans, and
- Extend the maximum term for working capital loans to 10 years.
B&I CARES Act Program loans “must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020,” the agency said.
USDA announced the expanded B&I CARES Act Program authorities in a notice published in the May 21 Federal Register. Program funding expires Sept. 30, 2021.
Applicants may contact the USDA Rural Development State Office where the project is located.
USDA is developing application guides for lenders and borrowers on the B&I CARES Act Program. The agency also will host two webinars to provide an overview of program requirements.
To register for the webinar on Wednesday, May 27 at 3:30 p.m. Eastern Time, visit https://globalmeet.webcasts.com/starthere.jsp?ei=1322642&tp_key=7a700acddd.
To register for the webinar on June 3 at 2 p.m. Eastern Time, visit https://globalmeetwebinar.webcasts.com/starthere.jsp?ei=1324161&tp_key=6067315417.