USDA Rural Development. Business Programs

Transcription

1 USDA Rural Development Business Programs Funding Opportunities JAMES R. COMBS

2 USDA Rural Development Mission: increase economic opportunities and improve quality of life in rural America Assist rural individuals, communities and businesses Financial and technical assistance

3 USDA Rural Development Essential public facilities & services Housing assistance Business programs Utilities programs

4 Rural Business Programs Business & Industry Guaranteed Loans Renewable Energy for America Program (REAP) Intermediary Relending Program Rural Economic Development Loans and Grants Rural Business Development Grants Value Added Producer Grants

5 Business & Industry Guaranteed Loans Purpose: Create and maintain employment Improve rural economy

6 How it Works Lender originates and services loan USDA guarantees loss up to 80% of loan

7 Benefits to Borrowers Greater loan amounts Lower interest rates Stronger loan application Lesser equity injection Longer terms Assist businesses that may not qualify for conventional financing

8 Eligibility Project must be located in an area other than: a city or town having a population of greater than 50,000 the urbanized area contiguous and adjacent to such a city or town, as defined by the latest decennial census

9 Eligible Borrowers Individuals Profit and non-profit Corporations Partnerships Cooperative organizations Public bodies Federallyrecognized tribal organizations

10 Eligible Borrowers Must be engaged in or proposing to engage in a business: Manufacturing Wholesale Retail Service

11 Eligible Loan Purposes Purchase and develop land and improvements Business expansion Business acquisitions which will keep the business from closing / create or save jobs Machinery & equipment Start-up costs and working capital Fees & charges for professional services (legal, appraisal, feasibility, etc.)

12 Eligible Loan Purposes Commercial properties for lease (Non-Owner Occupied) Energy projects Educational & training facilities Community facility projects Forestry, nurseries Debt restructuring (in some cases) Tourist & recreation facilities

13 Guarantee Limits 80% of loans up to $5 million 70% of loans greater than $5MM up to $10 million 60% of loans greater than $10MM up to $25 million

14 Renewable Energy for America Program (REAP) Created under Farm Bill Provides financial assistance for farmers, ranchers and rural small businesses Purchase renewable energy system or make energy efficient improvements Grants and guaranteed loans

15 Renewable Energy Biomass Bio energy Anaerobic digester Wind Large vs. small Solar Electric Thermal Geothermal Direct use (heat pump) Electric generation Hydrogen Hydroelectric (small) Hybrids Large vs. small

16 Grant Funding Grants may be made for up to 25% of eligible project costs Renewable energy max grant: $500,000 Minimum: $2,500 Energy efficiency max grant: $250,000 Minimum: $1,500

17 MO Projects Funded Grain dryer replacement (Energy Efficiency) Biomass furnaces (thermal conversion) Geothermal (heat pump) HVAC Anaerobic digesters Solar Small wind Biomass pelletizer (mfg pellet fuel) Energy Efficiency building improvements (lights, insulation, windows, HVAC)

18 Rural Economic Development Loans and Grants (REDLG) (Loan) Pass-through funding with Rural Electric Cooperatives Zero-interest 10-year loans For-profit and non-profit ultimate recipients eligible Competitive funding $1,000,000 max loan

19 Rural Economic Development Loan and Grants (Grant) Electric cooperative can obtain grant to set up RLF $300,000 max grant Electric coop must match 20% of grant amount First loan from RLF must be non-profit or community project

20 REDLG Projects Funded Healthcare- hospitals, clinics, medical equipment Community college expansion (buildings) HVAC system for school district Manufacturing facility expansion Spec building in industrial park

21 Intermediary Relending Program Eligible for public bodies or non-profits 1% interest, 30-year loan Intermediary uses IRP loan from USDA and matching funds to set up Revolving Loan Fund Small business or community projects

22 Intermediary Relending Program Active Revolving Loan Fund Intermediaries in Missouri: Missouri Agricultural & Small Business Development Authority (MO Dept. of Ag) Meramec Regional Planning Commission (St. James) Green Hills Regional Planning Commission (Trenton) Resources for Missouri Inc. (RMI; Jefferson City) Justine Peterson, Inc. (St. Louis, covers SW Missouri)

23 Rural Business Development Grant Grants made to public bodies or non-profit entities Support the development of small and emerging business enterprises in rural areas Funding for infrastructure or technical assistance

24 Rural Business Development Grant Utility connection Equipment Street/road to project site Feasibility studies Technical assistance to small business

25 Value Added Producer Grants Value is added to ag commodity by producer Change in physical state Example: Milk processed into cheese, butter, and cream

26 Value Added Producer Grants Grant funds for: Business planning (market feasibility, business plan) or Working Capital $75,000 (planning)/ $250,000 Working Cap. Dollar-for-dollar match (50% cost share)

27 USDA RURAL DEVELOPMENT - MISSOURI BUSINESS PROGRAM CONTACTS

28 Websites Missouri USDA Rural Development: Missouri Business Webpage: