Intermediary Relending Program
Applications accepted on an ongoing basis
USDA Rural Development (USDA RD)
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:
- 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 operating expenses 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 $2,000,000 financing for the first time
- Up to $1,000,000 each time after that
Terms for intermediary lenders:
- 1% fixed interest rate
- Maximum term is 30 years
- Interest-only payments may be allowed during the first 3 years
Total combined debt from all funding for intermediaries cannot be more than $15,000,000.
Funding available to ultimate
- $250,000 or 75% of total project costs, 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 citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence, while corporations or other non-public borrowers must be at least 51% owned by persons who are either citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence
- 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
- Intermediaries organized as a cooperative can make a loan to one of its members.
- Applicant owes no delinquent debt to the federal government
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
- Have acceptable capitalization
What This Program Funds
Buildings and Facilities • Equipment • Operating Costs and Staffing • Starting a Business
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.
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