Missouri Main Street Connection Downtown Revitalization Conference July 25, 2019
USDA – Rural Development Mission “ Helping to improve the economy and quality of life in rural America.”
USDA Overview United States Department of Agriculture ➢ 17 Agencies ➢ Rural Development is one of those agencies ➢ Within RD there are 3 divisions ✓ Rural Business and Cooperative Service ✓ Rural Housing Service ✓ Rural Utility Service ➢ RD delivers over 40 programs to rural communities ➢ All programs fall within the administrative oversight of one the three divisions listed above
Innovation Center Working together to develop fresh, creative solutions – Innovate Data Partnerships Analytics Policy and Trend Analysis Regulations Innovation Management Center Drive synergies by promoting collaboration across agencies Business States and Rural community capacity building Center Programs
Population Guidelines Business Programs: 50,000 and below (some program exceptions for local food projects) Community Programs: 20,000 and below Housing Programs: 35,000 and below Water and Waste Water Programs: 10,000 and below
Business and Industry (B&I) Guaranteed Loans Program Purpose: Bolsters the existing private credit structure through the guaranteeing of loans for rural businesses, allowing private lenders to extend more credit than they would typically be able. Who May Apply: Lenders with legal authority, sufficient experience, and financial strength to operate a successful lending program. Eligible borrowers: For-profit business, nonprofits and cooperatives, federally-recognized tribes and public bodies Loan guarantee limits: 80% for loans of $5 million or less 70% for loans between $5 and $10 million 60% for loans exceeding $10 million, up to $25 million maximum Terms: Interest rate negotiated between lender and borrower, subject to Rural Development review. Real estate – 30 years, machinery and equipment -15 years and working capital – 7 years. Initial guarantee fee of 3% with annual renewal fee of 0.5% on outstanding principal.
Business and Industry (B&I) Guaranteed Loans Funded Project Examples: $276,000 to refinance hotel $1,650,000 to refinance commercial building $1,000,000 to assist with expansion of restaurant $146,000 to purchase auto body collision repair business $1,445,000 to purchase and improve a fitness facility $327,000 to assist with refinancing an automotive repair and retail parts store $1,471,000 to assist with expansion of a restaurant and events center $3,015,000 to assist with the purchase of a retail furniture business $950,000 for financing construction of an events center $2,900,000 for financing expansion of residential care facility
Rural Business Development Grant (RBDG) Program Purpose: Designed to support targeted technical assistance, training and other activities leading to development or expansion of small and emerging private businesses; separated into enterprise and opportunity activities. Who May Apply: Public bodies, units of government and community-based non-profit organizations and Federally- recognized tribes Special Considerations: Eligible costs include real estate improvements, equipment, utility/infrastructure, feasibility studies, engineering services, and/or technical assistance to small businesses. Competitive application process Application Grant Request Limits: Grants less than $100,000 have highest competitive priority
Rural Business Development Grant (RBDG) Funded Project Examples: $45,731 to assist city with street improvements $50,000 to improve parking areas to support small businesses $61,788 to expand community college nursing program $29,500 to provide technical assistance to small manufacturing businesses $36,300 for the purchase of commercial paper shredding equipment to support employment at a sheltered workshop $48,600 for the purchase of equipment for a food hub business $22,500 to purchase equipment for use in a recycling center $38,550 to assist with the purchase of equipment for a community theater and events building to support small business opportunities
Rural Business Development Grant (RBDG) “We are so thankful to the USDA for their assistance with this project!” @ MainStreetToccoa, Historic Ritz Theater in Toccoa, Georgia Rural Business Development Grant funded part of the latest wave of renovations at this beautifully restored historic theater that has been operational since 1939. Georgia State Office
Rural Economic Development Loans and Grants (REDLG) Program Purpose: Assist economic and community development projects in rural areas. Who May Apply: Rural electric or telecommunications cooperatives Special Considerations: Real estate improvements, equipment, working capital Pass-through funding from cooperatives to ultimate beneficiary (community project) 20% Match Required from cooperatives Application Request Limits: Up to $1,000,000 Loan Up to $300,000 Grant Terms: All funds must be paid back to cooperative. Re-paid Grant may become Revolving Loan Fund for cooperative Re-paid Loan is paid to USDA – Rural Development Loan term is 0% for 10 years
Rural Economic Development Loans and Grants (REDLG) Funded Project Examples: $800,000 Loan to construct new recreation facility $250,000 Loan to provide working capital to programs to assist residents with developmental disabilities $900,000 Loan to finance expansion of meat processing facility $500,000 Loan to construct new building at a regional port authority $1,000,000 Loan to construct new family theme park
Rural Energy for America Program (REAP) Program Purpose: Assist rural small businesses and agricultural producers by providing renewable energy and energy efficiency project development assistance. Who May Apply: Farmers and rural small businesses Special Considerations: Grant is 25% of eligible project costs Application Grant Request Limits: $500,000 maximum for renewable energy projects $250,000 maximum for energy efficiency
Rural Energy for America Program (REAP) Funded Project Examples: $20,000 Grant to assist fitness center with solar array energy system purchase $1,914 Grant to assist auto dealership with energy efficiency improvements $18,888 Grant to assist bank with purchase of solar array energy system $2,862 Grant to assist bed and breakfast with purchase and installation of energy efficiency improvements $12,707 Grant to assist upholstery and furniture repair business to purchase a solar array energy system $48,915 Grant to assist feed and fertilizer business with energy efficiency improvements $6,890 Grant to assist cabinet manufacturing business with energy efficiency improvements $27,623 Grant to assist grocery store with energy efficiency improvements $20,000 Grant to assist a hotel with purchase of a solar array energy system $20,000 Grant to assist a pharmacy with purchase of a solar array energy system
Intermediary Relending Program (IRP) Program Purpose: Provides low-interest loans to local intermediaries that re-lend to businesses and nonprofits for community development projects in rural communities. Who May Apply: Public bodies, nonprofits, cooperatives and Federally-recognized tribes Limits to Intermediaries: Up to $2 million for first financing Up to $1 million at a time thereafter Total aggregate debt is capped as defined by funding notice. Terms for Intermediary: Interest rate is fixed at 1% Maximum term is 30 years Interest-only payments may be permitted for the first 3 years Recipient Loans: Maximum loan is $250,000; or 75% of total cost of recipient’s project for which loan is being made, whichever is less. Interest rate and term are set by intermediary.
Intermediary Relending Program (IRP) Funded Project Examples: $500,000 Loan to continue a revolving loan fund, which will provide low-interest loans for small business and housing assistance. $500,000 Loan to provide low-interest loans to relend for business and community development. These funds will supplement an existing revolving loan fund in order to create new job opportunities or retain existing jobs. $649,293 Loan to start a revolving loan fund, which will provide financing for small business for energy efficiency and renewable energy projects.
Value-Added Producer Grant (VAPG) Program Purpose: Helps agricultural producers enter into value-added activities related to the processing and/or marketing of bio-based, value-added products. Generating new products, creating and expanding marketing opportunities and increasing producer income are the goals of this program. Who May Apply: Independent producers, agricultural producer groups, farmer- or rancher-cooperatives and majority- controlled producer-based business ventures Eligible Uses: Grant and matching funds can be used for planning activities or for working capital expenses related to producing and marketing a value-added agricultural product. Examples of planning activities include conducting feasibility studies and developing business plans for processing and marketing the proposed value-added product. Examples of working capital expenses include processing costs, marketing and advertising expenses and some inventory and salary expenses
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