May 21, 2020Ag producers part of $1B in loan guarantees for rural businesses
U.S. Secretary of Agriculture Sonny Perdue announced May 21 that the Department is making available up to $1 billion in loan guarantees to help rural businesses during the coronavirus pandemic.
Additionally, agricultural producers that are not eligible for USDA Farm Service Agency loans may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In addition to expanding eligibility to certain agricultural producers, the changes Secretary Perdue announced today 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.
