USDA Rural Development

May 2011

USDA RD

Our MissionTo increase economic opportunity and improve the quality of life for all rural

Americans

USDA - Rural Development

Rural Business / Cooperative ProgramsBusiness Finance-Nine Programs

Business and Industry Guarantee

For starting or expanding rural businesses and cooperatives

Reduces risk to lenders and raises their lending limits

Guarantees to local lenders 80% up to $5 million 70% up to $10 million 60% up to $25 million

Business and Industry

Guaranteed Loans• Loans are Made by Eligible

Lenders• Uses of loans:

– Equipment– Construction– Working capital– Refinancing in Certain

Situations

Provides Grants to:

Public Bodies (Cities) Non-Profits, Tribes All Serving Rural Areas

Rural Business Enterprise Grant(RBEG)

• Grants can finance small and emerging private businesses and cooperatives, provide technical assistance or fund a revolving loan program

• Commonly requests are $99,000 or less have higher priority

Rural Business Opportunity Grants (RBOG)

• Eligible applicants: tribes, nonprofits, public bodies• Purposes:

– Identify and analyze business opportunities – Provide TA to existing or prospective entrepreneurs– Conduct local or multi-county Econ. Dev. Planning– Conduct leadership training– Pay for professional services for planning or training.

• Priority scoring: Applications under $50,000

• Zero Percent Interest Loans may be made to RUS Borrowers (Electric or phone Coops)

• Supplemental Funding of at Least 20% of the Zero Percent Interest Loan is Needed

• $740,000 Maximum Loan

Rural Economic Development Loan

• Revolving Loan Fund (RLF) Established by Electric or Telephone Coop

• Funding for Community / Medical Facilities and Education Facilities

• $300,000 Maximum Per Project

Rural Economic Development Grant

Value Added Producer Grants (VAPG)• Eligible: Individuals, LLC, LLP, For-Profits, or Non-

Profits that are owned or controlled by Ag Producers

• Deadline to be announced soon (60 day window to submit applications)

• Planning Grant $100,000 • Working Capital $300,000.• There is a $1 to $1 match requirement

• Must be a change in the physical state of the product

Changes to VAPG• Provide up to 10 % funding to beginner farmers and

socially disadvantaged farmers and ranchers;• • Provide up to 10 % funding to local and/or regional

supply networks that link producers with companies marketing their products;

• Give priority for grants to beginner farmers, socially disadvantaged farmers and ranchers, and operators of small and medium-sized family farms;

• Extend grant eligibility to producers who market their products within their state or within a 400-mile radius.

Sec. 9007: Rural Energy for America Program (REAP)

Grants and Loan Guarantees for Rural Small Businesses, Farmers and Ranchers

Renewable Energy and Energy Efficiency Improvement

• Purchase renewable energy systems

(A system that produces or produces and delivers usable energy from a renewable energy source)

• Energy Efficiency Improvements (Improvements to a facility or process that reduce energy consumption)

REAP Program Overview

• REAP– Cost Sharing

– The amount of the grant shall not exceed 25% of the eligible cost of the activity funded.

– The combined loan and grant made or guaranteed shall not exceed 75% of the eligible cost of the activity funded.

– Only post-application costs eligible.

What Small Businesses are Eligible?

• A private entity including a sole proprietorship, partnership, corporation, & cooperative

• Citizenship

• Visit http://sba.gov/size/index.html for meeting the size definition.

– NOTE: Public or private non-profits are not eligible.

What Agricultural Producers Are Eligible?

• Must directly engage in production of agricultural products.

• At least 50% of gross income must be from agriculture production.

• Citizenship.

Solar Powered Stock Tanks in the Powder River Basin: A Renewable Energy System

for Livestock Producers

Solar Energy

Wind Energy

Geothermal – Direct Use• A system that uses thermal energy directly from a

geothermal source

–At high temperatures, can directly heat water or buildings

–At lower temperatures, temperature difference between earth and air can heat and cool buildings

Blender Pumps• APPLICANT ELIGIBILITY The applicant must be a rural small business or agricultural producer. For gasoline

service stations with convenience stores, applicants must have total income of $27

million or less in the previous tax year. Total income is defined as gross receipts

less cost of goods sold.

Current on all Federal debts.

• PROJECT ELIGIBILITY The project must be for the purchase and installation of a renewable

flexible fuel blender pump system (such as mid-range ethanol blends or E85).

Application Deadlines• We encourage applicants to file early. • For renewable energy system and energy efficiency

improvement grant applications and combination grant and guaranteed loan applications: June 15, 2011.

• For renewable energy system and energy efficiency improvement guaranteed loan only applications: June 15, 2011

• For renewable energy system feasibility study and energy audits and assistance applications: June 30, 2011.

• FY11 $61 million for Guarantees/ $42 million for GrantsContact Rural Development office nearest you to start the

application process and get a firm bid!

Intermediary Relending Program

• Eligible applicant: Nonprofits, Tribes, public agencies

• Purpose: Start a revolving loan fund• Rates & Terms – 1% for 30 years to the

intermediaries and they relend• Deadline to apply: Quarterly

Rural Microentrepreneur Assistance Program (RMAP)

RMAP’s goal is to help new & existing rural microentrepreneurs by providing funds to

development organizations for microlending and technical assistance

RMAP

• Loans to capitalize revolving microloan funds

• Grants for microlenders to assist their applicants & borrowers and to build their own capacity

South Dakota RD Office LocationsAberdeen (605) 224-3360

Mitchell (605) 996-1564

Pierre (605) 224-8870

Rapid City (605) 342-0301

Sioux Falls (605) 330-4515

Watertown (605) 886-8202

Yankton (605) 665-2662

www.rurdev.usda.gov/sd

USDA Rural DevelopmentState Office

200 4th Street SW, Federal Building Rm. 210Huron, SD 57350-2477

(605) 352-1100 or 1-800-670-6553