Business and Industry Guaranteed Loans (B&I) are given for the improvement, development and financing of business or industry activities. These loans are designed to improve the economic and environmental conditions of rural communities by stimulating the existing private lending structure.

In order to begin, the applicant must show have plans to either provide employment or benefit the local community. Specifically, one must seek to promote the conservation, use and development of water or agriculture. The improvement of community economic conditions and decreasing reliance on non-renewable energies are also acceptable loan qualifications. Potential borrowers that are not legal entities must be either American citizens or legal residents living in the U.S to qualify.

Corporations applying for B&I funding must be majority owned (51%+) by legal residents or U.S. Citizens. As of now, this loan program is only available in rural areas with populations under 50,000 residents.

While B&I loan programs have strict application requirements, the funding granted is also limited in how it may be used. Most commonly, these loans are used to:

  • Avoid business closure that would result in the loss of employment opportunities.
  • Modernize, develop or repair an existing business venture.
  • Purchase land, buildings or other business facilities.
  • Improve leaseholds
  • Purchase equipment, supplies, machinery or inventory.

Business and Industry Loans are guaranteed by the United States Department of Agriculture – Meaning that the USDA promises to pay-off the loan if the borrower becomes unable. While this is a clear advantage to the borrower, banks take on tremendous liability in providing funding to fragile businesses.

The table below lists the maximum guaranteed percentages the USDA will provide. These figures are merely guidelines, as the actual percentages must be negotiated between the borrower, lender and USDA representative.

Loan Amount Max. USDA % Guaranteed
$5 Million and Below 80%
$5 Million to $10 Million 70%
$10 Million + 60%