Business & Industry Loans

About

USDA Hotel and Business LoansUSDA Business & Industry Loan  (B & I Loan)
Guaranteed Loans Program

Program Goal:

The USDA B & I Loan program is designed to encourage the commercial financing of rural businesses, thereby, achieving the primary purpose of the program to;

  • Create and save rural jobs and
  • Improve the economic and environmental climate of rural communities.

What Makes B & I Loans Different:

The Business & Industry Loan program is lender-driven. The USDA guarantees the loan rather than lending directly. A commercial lender requests the B & I guarantee, &, if approved, it makes and services the loan.

Benefits Of The B & I Guaranteed Loans Program For Businesses:

  • Higher loan amounts, strengthens the loan application, 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.

Authorized Uses Of Loan Funds:

A borrower must be engaged in or proposing to engage in a business that will

  • Provide employment
  • Improve the economic or environmental climate
  • Promote the conservation, development, & use of water for aquaculture; or
  • Reduce reliance on nonrenewable energy resources by encouraging the development & construction of solar energy systems, and other renewable energy resources.

Authorized Loan Purposes:

  • Business and industrial acquisitions, construction, conversion, expansion, repair, modernization or development costs.
  • Purchase of equipment, machinery or supplies.
  • Startup costs and working capital.
  • Processing and marketing facilities.
  • Pollution control and abatement.
  • Refinancing for viable projects, under certain conditions.
  • Purchase of startup cooperative stock for family sized farms where commodities are produced to be processed by the cooperative.

Size of Loan:

  • No Minimum
  • Up to $ 10 Million
  • Usually range from $ 200,000 to $ 5 Million

Types Of Assistance:

The federal guarantee available is dependent on the loan size & may be up to 85%.

Interest Rate, Terms, Payment Structure, & Fees:

Rate: Lender’s customary commercial interest rate—Negotiated by the lender and business, fixed or variable (But may not vary more often than quarterly).

Terms:

  • Working Capital–7 years maximum
  • Equipment–15 years maximum (not to exceed useful life of collateral)
  • Real-Estate–30 years maximum (not to exceed useful life of collateral)

Structure: Balloons are not permitted. Reduced payments may be scheduled in the first 3 years.
Fees: Lender’s reasonable & customary fees are permitted and should be negotiated by the lender & business. The USDA charges a one-time fee equal to 2% of the guaranteed amount.

CREFS
8655 E. Via De Ventura Suite G-200
Scottsdale, AZ 85258
Phone: (602) 885-1080