Published: March, 2019
Having specialized the SBA (U.S. Small Business Administration) federal loan programs the last twenty years, I am pleased to add the USDA (U.S. Department of Agriculture) business loan programs to my offerings since joining Fidelity Bank in 2017. I have many valuable relationships with commercial real estate and small business professionals who rely upon me for information about SBA loans to finance small business properties. With SBA lending, I always stressed that the real estate must be primarily owner-occupied by a small business in order to be eligible for the benefits of SBA financing. Because of the government backing on SBA and USDA business loans, lenders are able to offer lower down payments and longer repayment terms than traditional bank loans.
The USDA B&I (Business & Industry) loan program is similar to the SBA 7(a) government-guaranteed loan program for small businesses. Participating lenders can originate government-backed loans to businesses in rural areas to acquire a business, fund business expansion, fund a partner buyout, or for business real estate purchase or new construction.
With the USDA B&I loan program, however, real estate is not required to be owner-occupied by the business.
The borrower may be a landlord who owns a shopping center or office building without owning a company that occupies the property.
The purpose of the Business and Industry (B&I) Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits. The specific goals are to:
- Provide the guarantee of quality loans that provide lasting community benefits.
- Create or save jobs in rural areas.
- Provide assistance to small businesses and improve the local rural economy.
If you or a client have a rural business property in need of long-term financing, and the business is not receiving the loan terms they require from their banker, contact me with the property address to determine if the business is located in a USDA eligible “rural” location. For more details about the USDA B&I loan program, see the Fact Sheet at the following USDA web site link: https://www.rd.usda.gov/programs-services/business-industry-loan-guarantees