USDA Intermediary Relending Program

Link

https://www.rd.usda.gov/programs-services/business-programs/intermediary-relending-program

Additional Links

Fact Sheet

Deadline

Application Deadline: Apr 1, 2024

Sponsor

USDA Rural Development (USDA RD)

Purpose

Offers 1% low-interest loans to local lenders or intermediaries to establish revolving loan funds that will re-lend those funds to rural businesses or other eligible recipients. Aims to create and maintain employment opportunities, reduce poverty, promote business growth, and improve economic development in disadvantaged and isolated communities. Applicants eligible to apply for a loan from the intermediary lender are known as ultimate recipients.

Funds can be used for:

  • Promoting community development
  • Establishing a new business
  • Establishing and supporting microlending programs
  • Creating or retaining employment opportunities
  • Acquiring, building, converting, expanding, or repairing a business or business facility, especially to create or maintain employment opportunities
  • Buying or developing land, including easements, rights of way, buildings, facilities, leases, and materials
  • Buying equipment, leasehold improvements, machinery, or other supplies
  • Start-up costs and working capital
  • Pollution control and abatement
  • Transportation services
  • Feasibility studies and some related fees
  • Constructing hotels, motels, and convention centers
  • Educational institutions
  • Aquaculture-based small businesses in rural areas
  • Establishing revolving lines of credit and other eligible loan purposes described in 7 Code of Federal Regulations part 4274.319.

Amount of Funding

Funding available to intermediaries:

  • Up to $1,000,000

Terms for intermediary lenders:

  • 1% fixed interest rate
  • Maximum term is 30 years
  • Interest-only payments may be allowed during the first 3 years
  • $250,000 or more of the loan funds must be used in first 6 months after closing

Total combined debt from all funding for intermediaries cannot be more than $15,000,000.

Funding available to ultimate recipients:

  • $400,000 or 50% of the loan to an intermediary lender, whichever is less.

Terms for ultimate recipients are set by the intermediary lender, including interest rates and payment structure.

Who Can Apply

Ultimate recipient applicants eligible to apply for a loan from an intermediary lender include individuals, public or private organizations, or other legal entities if they meet the following requirements:

  • Have the authority to incur the debt and carry out the purpose of the loan
  • Individual borrowers must be U.S. citizens of the U.S. or permanent residents, while eligible organizations and entities must have a majority of its ownership held by U.S. citizens or permanent residents
  • Be located in a rural area
  • Applicant must be unable to finance the proposed project from its own resources or through commercial credit or other federal, state, or local programs at reasonable rates and terms
  • Must, along with its principal officers, including their immediate family, hold no legal or financial interest or influence in the intermediary or parties receiving loans from the intermediary lenders
  • Applicant owes no delinquent debt to the federal government
  • Must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents

Under this funding opportunity, eligible rural areas must meet the following criteria:

  • An area, city, or town with population of less than 50,000 residents
  • Any urbanized areas contiguous and adjacent to a city or town of 50,000 or more resident may not be eligible
  • The intermediary borrower's headquarters may be based within a larger city so long as the project service area is located in an eligible rural area
  • Intermediary lender may be located anywhere

Use the USDA Rural Business Services Property Eligibility search tool to determine if an address is located in an eligible area.

Nonprofits, cooperatives, federally recognized tribes, and other public bodies are eligible to become an intermediary lender if they meet the following requirements:

  • Have the legal authority to operate a revolving loan fund capable of carrying out the proposed loan purposes and obtaining, giving security for, and repaying the proposed loan
  • Have a proven record of successfully assisting rural business and industry, or, for intermediaries that propose to finance community development, a proven record of successfully assisting rural community development projects of the type planned
  • Have the services of a staff with acceptable loan making and servicing expertise
  • Can provide adequate assurance of repayment of the loan
  • Have sufficient capitalization or equity to sustain operations
  • Have no federal delinquent debt
  • Be unable to finance the fund through its own sources or other conventional financing
  • Have the ability to close the Intermediary Relending Program loan within 6 months of loan approval
  • Have a board consisting of business and civic leaders
  • A majority of the interest or membership in any nonpublic body intermediary must be composed of U.S. citizens

Geographic Coverage

Nationwide

What This Program Funds

Buildings and Facilities • Equipment • Operating Costs and Staffing • Starting a Business

Application Process

Applications are accepted year-round on a quarterly basis.

Application information, requirements, instructions, forms, and other resources can be found in the Federal Register.

Contact your local USDA Rural Development state office or an intermediary lender servicing your area to discuss your specific project and start an application.

To become a revolving loan fund lender through the Intermediary Relending Program, contact your local USDA Rural Development state office to discuss the opportunity.

Contact

For program questions:
Contact the appropriate USDA Rural Development state office or an intermediary lender servicing your area

Topics This Program Addresses

Community Planning and Coalition Building • Economic Development • Employment