USDA Business and Industry Deals

USDA Business and Industry financing are deals provided through a government program specifically targeted to rural small businesses to help bolster lending to creditworthy borrowers. The purpose of the program (administered by the Rural Business and Coop Program — part of the USDA’s Rural Development) is to improve economic health in rural areas with populations less than 50,000 people by having the government guarantee deals originated by private commercial lenders (federal or state chartered banks, savings and deals, farm credit banks and credit unions). By using the USDA business and industry guarantee, lenders are able to offer borrowers better rates and longer repayments terms because the lenders’ risk is reduced. USDA B&I financing must be fully-amortized term deals, as lines-of-credit are not offered. Borrowers are allowed to be headquartered in a larger area, provided the particular business project is located in a rural area, whereas the USDA lender may be located anywhere. If the borrower should default on their deal, the government agrees to cover lender losses up to $25 million dollar. deal guarantees are structured as such:

  • 80% for deals of $5 million or less
  • 70% for deals between $5 – $10 million
  • 60% for deals over $10 million


Uses of USDA Business and Industry deals

Most types of rural small businesses meet USDA eligibility requirements, including for-profit and nonprofit corporations, manufacturing companies, wholesale traders along with the retail and service industries. Use-of-funds can be used for virtually any business activity except for owner-occupied housing, golf courses, churches, lending organizations and a few other restrictions. Eligible businesses may use USDA Business and Industrial Deals for the following:

  • Startup costs
  • Business repair, modernization and development
  • Purchase and development of land, buildings and/or facilities in rural communities
  • Equipment purchases
  • Leasehold improvements
  • Machinery purchases
  • Purchase supplies
  • Purchase inventory
  • Refinance business debt (if it creates jobs)
  • Business and industrial acquisitions

Approval Rates



  • Origination fee: 3%
  • Renewal fee: 0.5% of principal
  • Max real estate term: 30 years
  • Max term on machinery and equipment: 15 years
  • Maximum working capital term: 7 years
  • No balloon payments
  • Down payment existing businesses: 10%
  • Down payment startups: 20%
  • Personal guarantee required: Yes


  • Credit application
  • Business tax returns
  • Financial statements
  • Schedules of liabilities
  • Personal tax returns
  • Personal financial statement
  • A/R and A/P aging schedules
  • Appraisals (if applicable)


  • Better rates than many other forms of financing
  • Access to capital where it wouldn’t have been available before
  • Long terms


  • Restrictions based on geography
  • Requires good credit
  • Requires 10-20% downpayment
  • Fees can be expensive

Business Financing Apply