This program bolsters the availability of private credit by guaranteeing loans for rural businesses. Let GMA help you with your application today! Contact us for more information.
Who may apply for this program?
Lenders with the legal authority, sufficient experience and financial strength to operate a successful lending program.
• Federal or State chartered banks
• Savings and loans
• Farm credit banks
• Credit unions
What kind of businesses qualify for loan guarantees?
• For-profit business
• Federally recognized Tribes
• Public bodies
What is an eligible area?
• Any area other than a city or town with a population of greater than 50,000 inhabitants and the urbanized area of that city or town
• The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area
• The lender may be located anywhere
• Projects may be funded in rural and urban areas under the Local and Regional Food System Initiative
How may funds be used?
Eligible uses include but are not limited to:
• Business conversion, enlargement, repair, modernization, or development
• Purchase and development of land, easements, rights-of-way, buildings, or facilities
• Purchase of equipment, leasehold improvements, machinery, supplies, or inventory
• Debt refinancing when refinancing improves cash flow and creates or saves jobs
• Business and industrial acquisitions when the loan will create or save jobs
Guaranteed loan funds MAY NOT be used for:
• Lines of credit
• Owner-occupied housing
• Golf courses
• Racetracks or gambling facilities
• Churches, church-controlled organizations or charitable organizations
• Fraternal organizations
• Agricultural production, with certain exceptions
What collateral is required?
Collateral must have documented value sufficient to protect the interest of the lender and the Agency. The discounted collateral value will normally be at least equal to the loan amount. Lenders will discount collateral consistent with sound loan-to-value policy. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).