USDA Loans
USDA Business & Industrial Loans:
Eligible Areas:
Projects financed under the B&I program must be located in the United States or its possessions/territories and must be in a rural area (defined as having a MSA population of less than 50,000).
Eligible Borrowers:
Any legal entity including individuals, public and private organizations and federally recognized Indian tribal groups there is no size restriction on the business.
Use of Proceeds:
USDA B&I Loans may involve acquisitions, construction, conversion, repair, modernization or debt refinance.
Loan proceeds can be used for real estate acquisition and/or improvements, machinery, equipment, furniture, fixtures and working capital. Closing costs and guarantee fees are also eligible.
Borrower Equity Requirements:
For existing businesses: a minimum of 10% tangible balance sheet equity is required at the time of issuance of the Loan Note Guarantee
For start-up businesses: a minimum of 20% tangible balance sheet equity is required at the time of issuance of the Loan Note Guarantee
Equity is determined in accordance with Generally Accepted Accounting Principles (GAAP)
Terms
Loan Terms:
All B&I loans are fully amortized with no balloons or call dates.
Maximum repayment terms are up to 30 years for real estate and improvements, up to 15 years (or useful life) for machinery, equipment, furniture and fixtures and up to 7 years for working capital.
Rates are based on a spread over the Prime Lending Rate. Rates vary depending on the specific strengths of the transaction.
A one-time Guarantee Fee of 2% of the guaranteed principal amount may due but rolled into loan. Other customary fees also apply.
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