Rural Economic Development Loan and Grant Program (REDLG)


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Fact Sheet


Application Deadline: Jun 30, 2024


USDA Rural Development (USDA RD)


Provides grants and loans to local utility organizations, also know as intermediaries, who then provide funding for local businesses, or ultimate recipients, to finance economic development projects in rural areas. Supports projects designed to establish and retain employment opportunities in rural communities or towns with populations at or below 50,000 residents.

  • The Rural Economic Development Loan (REDL) program provides zero-interest loans to local utilities who then pass through funds to local businesses.
  • The Rural Economic Development Grant (REDG) program provides grants funds to local utilities to establish a revolving loan fund (RLF) that can provide loans for projects to create or retain employment opportunities in rural areas.

Funds may be used for:

  • Business incubators
  • Community development assistance for nonprofit and public entities, especially to develop or enhance employment opportunities
  • Education and training facilities and equipment to help rural residents promote economic development
  • Facilities and equipment for rural medical care
  • Start-up venture expenses, such as financing fixed assets, including real estate, building, equipment, or working capital
  • Business expansion
  • Technical assistance

Amount of Funding

Funding information and terms for intermediaries:

  • Maximum grant amount to establish a RLF: $300,000
  • Up to 10% of grant funds may be used for operating expenses over the life of the RLF.
  • Maximum loan amount: $2,000,000
  • Interest rate: 0%
  • Maximum term: 10 years

Grants require:

  • Intermediaries to provide matching funds for 20% of total project costs
  • Funds must be repaid to USDA upon termination of the RLF

Terms on the RLF loan to the ultimate recipient:

  • May request up to 80% of total project costs using REDL or REDG funds, with the remaining 20% of projects costs provided by the ultimate recipient or the intermediary.
  • Interest rate: 0%
  • Maximum term: 10 years
  • Repayment may be deferred for up to 2 years
  • Intermediaries may incorporate interest rates or administrative loan fees after funds have been dispersed and revolved once. First time around all loans are at a 0% interest rate.

Who Can Apply

Eligible applicants must be:

  • Former Rural Utilities Service (RUS) borrowers who borrowed, repaid, or pre-paid an insured, direct, or guaranteed loan
  • Nonprofit utilities that are eligible to receive assistance from the Rural Development Electric or Telecommunication Programs
  • Current Rural Development Electric or Telecommunication Programs borrowers

Geographic Coverage


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.

Interested applicants should work with their USDA Rural Development state office to obtain application documents. Application information, requirements, and instructions are available in the Federal Register.

Utility organizations interested in applying for the program should contact the Business Programs Specialist in the appropriate USDA Rural Development state office for more information.


For program questions:
Contact the appropriate USDA Rural Development state office

Topics This Program Addresses

Economic Development • Employment • Healthcare Facilities • Infrastructure