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State of New Mexico

Rural Development Business & Cooperative Programs

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Rural Development Business & Cooperative Programs

• Business & Industry Guaranteed Loans

• Intermediary Relending Program• Rural Business Opportunity Grants• Rural Business Enterprise Grants• Rural Economic Development Loans &

Grants• Renewable Energy and Energy

Efficiency Program• Value Added Producer Grants• Rural Cooperative Development

Grants• Cooperative Development Assistance

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B&I Guaranteed LoanHow does it work?

• An authorized commercial lender makes a loan to the rural business

• USDA Rural Development acts a co-signer on the loan by guaranteeing up to 80%– Helps borrowers gain access to capital when lenders wouldn’t

otherwise make the loan– Helps lenders by reducing their risk– Allows lenders to lend more than their legal limit (the guaranteed

amount doesn’t count towards this limit)• Banks pay a small initial fee of 2% and an annual fee

of .25%

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B&I Guaranteed LoanHow can the loan proceeds be used?

• Working capital

• Machinery and equipment

• Buildings and real estate

• Certain types of debt refinancing

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Rural Development Business and Cooperative Programs

Intermediary Relending Program

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Intermediary RelendingHow does it work?

• USDA Rural Development loans money to the intermediary

• The intermediary establishes a revolving loan fund and loans money from the fund to the ultimate recipients

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Rural Development Business and Cooperative Programs

Rural Business Opportunity Grants (RBOG)

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RBOGHow does it work?

• USDA Rural Development provides grant funds to the grantee for use in promoting sustainable economic development in rural communities with exceptional needs

• Most grants are for $50,000 or less

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RBOGHow can the funds be used?

• Identify and analyze business opportunities• Identify and provide technical assistance• Establish business support centers• Conduct local community or multi-county economic

development planning• Establish centers for training• Technology and trade• Conduct leadership training• Pay reasonable fees for Professional Services

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Rural Development Business and Cooperative Programs

Rural Business Enterprise Grants (RBEG)

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RBEGHow does it work?

USDA Rural Development awards grant funds to the grantee for use in financing and

facilitating the development of small and emerging businesses

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RBEGUse of funds

• The grantee can assist small and emerging businesses in a number of ways:– Technical Assistance to small and emerging businesses

• Marketing Studies• Feasibility Studies• Business Plans• Training

– Purchase machinery and equipment to lease to a small and emerging business

– Create a revolving loan fund• Providing partial funding as a loan to a business to purchase

equipment, working capital or real estate– Construct a building for a business incubator

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Rural Development Business and Cooperative Programs

Rural Economic Development Loan and Grant (REDLG) Programs

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REDLGHow does it work?

• USDA Rural Development provides a 0% interest loan or grant to an eligible rural utility for the establishment of a revolving loan fund– In the case of a grant, the rural utility is required to contribute to

the revolving loan fund an amount equal to 20% of the grant– This must remain part of the fund until the fund is terminated

• The rural utility loans money from the revolving loan fund to a third-party recipient

• The third-party recipient must use the money to promote economic development and job creation in rural areas

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REDLGHow can the funds be used?

• When the rural utility receives a grant, it can loan the money for:– Community development projects – Community facilities / services– Educational facilities– Medical facilities– Business incubators to assist in developing emerging enterprises (for-

profits are not eligible)

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REDLGHow can the funds be used?

• When the rural utility receives a loan, it can re-loan the money for:– Business expansions and startups

• Cost of buildings• Equipment• Machinery• Land• Site development• Working capital

– Community infrastructure– Community facilities / services– Medical facilities and equipment– Educational facilities and equipment to provide training and job skills– Business incubator projects to assist in developing emerging enterprises

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Rural Development Business and Cooperative Programs

Renewable Energy Systems and Energy Efficiency Improvement Loan and Grant Program (9006)

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Section 9006How does it work?

USDA Rural Development awards grants and / or guarantees loans to purchase renewable energy systems and make

energy efficiency improvements

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Rural Development Business and Cooperative Programs

Value Added Producer Grants (VAPG)

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Value Added Producer GrantsHow does it work?

• USDA Rural Development makes grants to enable producers to develop businesses that produce and market value-added agriculture products

• Maximum grants:– Planning Grant - $100,000– Working Capital - $150,000