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Funding will help rural businesses meet working capital needs during pandemic.
May 21, 2020
2 Min Read
U.S. Agriculture Secretary Sonny Perdue announced that the U.S. Department of Agriculture is making available up to $1 billion in loan guarantees to help rural businesses meet their working capital needs during the coronavirus pandemic. Additionally, agricultural producers who are not eligible for USDA Farm Service Agency loans may receive funding under the USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief & Economic Security (CARES) Act.
“Under the leadership of President [Donald] Trump, USDA is committed to being a strong partner to rural businesses and agricultural producers and being a strong supporter of all aspects of the rural economy,” Perdue said. “Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment.”
In addition to expanding eligibility to certain agricultural producers, the changes Perdue announced May 21 allow USDA to:
Provide 90% guarantees on B&I CARES Act Program loans;
Set the application and guarantee fee at 2% of the loan;
Accept appraisals completed within two years of the loan application date;
Not require discounting of collateral for working capital loans, and
Extend the maximum term for working capital loans to 10 years.
B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.
USDA intends to consider applications in the order they are received. However, the department may assign priority points to projects if the demand for funds exceeds availability.
USDA announced the expanded B&I CARES Act Program authorities in a notice published in the May 21 Federal Register. Program funding expires Sept. 30, 2021.
Eligible applicants may contact their local USDA Rural Development State Office in the state where the project is located.
USDA is developing application guides for lenders and borrowers on the B&I CARES Act Program. The agency also will host two webinars to provide an overview of program requirements.
To register for the webinar at 3:30 p.m. (Eastern) on May 27, visit globalmeet.webcasts.com/starthere.jsp?ei=1322642&tp_key=7a700acddd.
To register for the webinar at 2:00 p.m. (Eastern) on June 3, visit globalmeetwebinar.webcasts.com/starthere.jsp?ei=1324161&tp_key=6067315417.
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