USDA Announces Business Development Programs

The US Department of Agriculture (USDA) has recently determined that Xenia is an eligible area for several business financing programs. Applicants need not be involved in agriculture. The loans are available to businesses and industries involved in manufacturing, wholesale, retail and services. Projects must involve job creation or retention.

Similar to the Small Business Administration programs, the USDA primarily provides loan guarantees to eligible commercial lenders, which allows them to offer lower rates and better terms.

The primary program is the Business and Industry Loan Guarantee. USDA will guarantee loans of up to $10 million. Eligible purposes include purchase of land and buildings; purchase of machinery, equipment and leasehold improvements; business acquisitions; debt refinancing; energy projects; inventory and term working capital.

The USDA will guarantee 80 percent for loans up to $5 million, and 70% for loans in excess of $5 million. Due to American Recovery and Reinvestment Act provisions, some loans may be eligible for up to a 90 percent guarantee. 

Terms are for up to 7 years for term working capital, up to 15 years on machinery and equipment and up to 30 years for real estate. Loans must be fully collateralized, and personal guarantees are generally required. There is a one-time fee of 2% of the guarantee loan, and an annual renewal fee of ¼ percent of the principal balance of the guaranteed amount, as of 12/31 of each year.

For additional information, please go to http://www.rurdev.usda.gov/oh/busdevel.htm