USDA - Business & Industry Loan Guarantees

Reset Funding is proud to collaborate with strategic partners to offer comprehensive financing solutions under the USDA's OneRD Guaranteed Loan Programs. Our expertise lies in packaging and sourcing financing to support rural businesses in their growth and development initiatives.

Business & Industry (B&I) Loan Program Overview

The B&I Loan Program is designed to bolster the economic vitality of rural communities by providing loan guarantees to commercial lenders. This support enables lenders to offer affordable financing to eligible rural businesses, thereby fostering job creation and retention.

Eligible Borrowers

Entities that may qualify for the B&I Loan Program include:

• For-profit and non-profit businesses
• Cooperatives
• Federally-recognized Tribes
• Public bodies
• Individuals engaged or proposing to engage in a business venture

Entities may have existing operations, be expanding operations, or be initiating startup ventures.

Eligible Projects

Loan funds can be utilized for a variety of purposes, including:

• Business conversion, enlargement, repair, modernization, or development
• Purchase and development of land, buildings, and associated infrastructure for commercial or industrial properties
• Acquisition and installation of machinery, equipment, supplies, or inventory
• Refinancing debt to improve cash flow and create or save jobs
• Business and industrial acquisitions when the loan will maintain business operations and create or save jobs

Projects must be located in eligible rural areas and should result in the creation or preservation of rural jobs. Use the OneRD Map to determine project location eligibility.

Ineligible Projects

Certain projects are not eligible for B&I loan guarantees, including:

• Independent living spaces, including single family housing, multi-family housing, trailer parks, and living communities. (Note: This does not preclude healthcare-related living facilities)
• Projects that do not result in the creation or preservation of jobs
• Businesses involved in the production, processing, or distribution of marijuana
• Passive real estate investments
• Religious organizations or businesses
• Agricultural production, with certain exceptions

It's important to note that this is not an exhaustive list, and other ineligible scenarios may apply.

Loan Structures and Amounts

The B&I Loan Program offers flexible loan structures to meet the diverse needs of rural businesses. Key features include:

• Loan Amounts: $3 million to $25 million
• Repayment Terms: Up to 30 years, fully amortizing. The loan term is determined by collateral and use of funds, with a blended weight calculated for loans financing multiple asset categories.
• Construction Financing: Available with interest-only payments during the construction period.

Fees:

• The Agency charges an initial fee equal to 2.4% of the loan amount.
• Bank origination fees vary.

Equity Requirements:

• Existing businesses: Minimum of 10% balance sheet equity or cash injection.
• New businesses: Minimum of 20% balance sheet equity or cash injection. An additional 5% is required if requesting a construction loan.
• Collateral: Must be sufficient to protect the interests of the lender and the USDA; typically includes assets being financed.
• Capital Stacking: Funds can be combined with other financing sources, such as Rural Energy for America Program (REAP), New Markets Tax Credits (NMTCs), EB-5, Commercial Property Assessed Clean Energy (CPACE), Historic Tax Credits (HTCs), Investment Tax Credits (ITCs), and Tax Increment Financing (TIFs), among others.

By partnering with Reset Funding, businesses can effectively navigate the complexities of the OneRD Guaranteed Loan Programs, ensuring access to the necessary capital to achieve their objectives.