USDA greenlights $1 billion in loan guarantees for farmers
The USDA is making $1 billion in loan guarantees available to rural business and farmers to meet their working capital needs as the health crisis continues.
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.
“Under the leadership of President 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,” Secretary 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 Secretary Perdue announced today allow USDA to:
- Provide 90 percent guarantees on B&I CARES Act Program loans;
- Set the application and guarantee fee at two percent 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 15 February 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 authorities in a notice published on page 31035 of the May 22 Federal Register. The Department will begin accepting applications for B&I loan guarantees on 22 May 2020. Applications must be received no later than midnight Eastern Daylight Time on 22 June 2020, or until funds are expended. Program funding expires 30 September, 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.
Click here to register for the webinar on Wednesday, 27 May at 3:30 pm Eastern Time.
