How to apply for USDA Rural Development loans

Learn about loan programs for rural businesses and agricultural producers to supplement their working capital and respond to economic impacts of the coronavirus pandemic.

USDA RURAL DEVELOPMENT B&I CARES ACT LOAN PROGRAM

Are you a US business operating in a rural zone?

Do you need working capital of $2MM or more?

If your company meets the eligibility requirements for the USDA RD loans, and is seeking more than $2MM to prevent, prepare for or respond to the effects of the coronavirus pandemic, let Cerebro help you.

Find out how much money you could receive today!​

The USDA Rural Development Business & Industry CARES Act program provides working capital to help rural businesses prevent, prepare for or respond to the effects of the coronavirus pandemic. This program is authorized by the Consolidated Farm and Rural Development Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020. 

With the USDA Rural Development’s Business & Industry CARES Act Program, rural business and agricultural lenders can partner with the USDA to help support and revitalize the economic infrastructure of rural communities impacted by the pandemic. USDA has nearly $1 billion in loan guarantee authority for this program, and will guarantee up to 90% for eligible loans. 

If you are a rural business owner or agricultural producer needing assistance to manage the impact of this economic disruption, a USDA-backed loan guarantee may be an option to secure the working capital you need to stay in operation and move forward. 

Applications are due before September 15, 2021 or before the program runs out of funding. Don’t wait! Let Cerebro help you get the money to keep your business operating during this uncertain time.

What is a rural business?

Rural businesses reside in areas outside of a city or town with a population of fewer than 50,000 people. The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area. Business eligibility can be determined by referencing USDA’s Rural Business Services Property Eligibility tool.

Who is eligible for USDA RD loans?

For-profit businesses, nonprofits, cooperatives, federally-recognized Tribes, and public bodies may qualify for the USDA Rural Development B&I CARES Act program. Additional eligibility criteria include: 

Why engage multiple banks?

Savvy business owners will run a competitive RFP process for their USDA RD loans in order to receive the best deal and have the highest probability of getting access. The USDA RD loan process will not be standardized and will resemble a standard credit request approval process which is unique to each bank. 

Loan Sizes

Banks may vary in their aggressiveness toward this new program and some might not offer the full loan amounts.

Interest Rates

Interest rates are negotiated between the lender and borrower which mean they can vary from bank to bank. Some might be variable while others offer fixed rates.

Additional Requests

Some banks may require new borrowers to switch their treasury business. And some may have more onerous diligence processes than others.

Availability

Some banks may prioritize customers with larger loan amounts and some banks might not participate at all. Knowing which banks to engage saves you time and effort.

What makes Cerebro Capital different?

Cerebro Capital’s platform uses data-driven algorithms, direct access to over 650 lenders, and loan experts to increase the certainty of funding. Cerebro can help ensure you receive the USDA RD funds that your company is eligible for under the CARES Act. 

Access Large Network of Lenders

We can help you submit the application to lenders who specifically offer the MSLP loans as well as additional loan options that may be available in conjunction with the Main Street Loan Facility.

Capital Markets Team & Expert Guidance

Have a team of loan experts review your loan application, craft a deal narrative, and expedite loan closing. Cerebro's team ensures you are receiving the highest loan amount quickly.

Workflow Software & Data Rooms

Software tools help you organize application requirements, diligence lists, and lender Q&A. Online access provides visibility on lender's status to funding.

Ready to start the process?

1) Complete Loan Assessment

Start your preliminary loan application process online with a simple 15 minute form. Your company profile will be cross-referenced against data from over 650 lenders.

2) Loan Consultation Call

Based on your loan assessment data, Cerebro's expert team will answer questions and provide specifics on probability of closing success, cost of capital, loan structures and closing timelines.

3) Invite Matched Lenders

Data-driven matching provides list of top competitive lenders. Borrower can select from their existing or new lenders in our network, including commercial banks and non-bank lenders.

4) Launch Competitive RFP Process

Debt placement platform includes integrated data rooms and workflow tools to run a streamlined competitive bid process to get to the best terms with the least hassle.

USDA Rural Development Lending FAQs

Eligible borrowers are rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020. Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence. Rural areas are defined as outside of a city or town with a population of fewer than 50,000 people. The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area.

Your company’s loan amount will vary from bank to bank but will be dependent on various factors including: debt service, collateral, and use of proceeds. Estimate your loan amount by completing a FREE loan assessment. 

No, this program is very different than the Paycheck Protection Program. Rather this is a true loan with interest payments and a maturity date. 

90% of USDA RD loans under the Cares Act are backed by the government. This allows banks to stretch further than they otherwise would. 

 

Yes. A Business that receives a loan through the SBA’s Payroll Protection Program can be an Eligible Borrower under USDA B&I if it meets the Eligible Borrower criteria.

Only in very specific instances where debt was incurred subsequent to February 15, 2020 and used for eligible working capital purposes in compliance with the B&I CARES Act Program.

USDA RD B&I loans have a maximum loan term of 10 years. Loans must be repaid in full and amortized by the maturity date; balloon payments are not permitted. Interest payments may be deferred in the first year; principal payments may be deferred for up to 3 years. Interest rates are negotiated between the lender and borrower, subject to Agency review.

 

Collateral must have documented value sufficient to protect the interest of the lender and the Agency. The collateral value must be at least equal to the loan amount. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).

Yes. Guaranteed loan funds may not be used for

  • Purchase and development of land, buildings, and associated infrastructure for commercial or industrial properties, including expansion or modernization;
  • Business acquisitions;
  • Leasehold improvements;
  • Constructing or equipping facilities;
  • Purchase of machinery and equipment; and
  • Debt refinancing unless such debt was incurred subsequent to February 15, 2020 and used for eligible working capital purposes in compliance with the B&I CARES Act Program.
  • Lines of credit.
  • Owner-occupied and rental housing.
  • Golf courses.
  • Racetracks or gambling facilities.
  • Churches, church-controlled organizations or charitable organizations.
  • Fraternal organizations.
  • Lending, investment and insurance companies.
  • Projects involving more than $1 million and the relocation of 50 or more jobs.
  • Agricultural production, with certain exceptions (Agricultural production is not an eligible loan purpose unless the project is not eligible for financing through the USDA Farm Service Agency.)
  • Distribution or payment, including loan payments, to an owner or beneficiary of the borrower.

If you need financing for one of these purposes, this loan might not be a good fit but others could be. Cerebro works with loan programs of all types. Contact us today to learn more. 

Cerebro Capital is working with corporate borrowers who are seeking more than $2MM in financing through any programs including through the USDA RD B&I CARES Act program. You can start the process by filling out a loan assessment

NOTE: None of the information contained herein is intended to be legal, tax, or investment advice, nor should it be relied on as such. You should consult your own legal, tax investment or other advisors, at both the onset of any transaction and on an ongoing basis to determine the laws and analyses applicable to your specific circumstance. Cerebro Capital, Inc. hereby disclaims all warranties associated with this information. The information contained in this communication may be obtained from a variety of sources and may be subject to change and Cerebro does not accept responsibility for, or guarantee it to be, accurate, timely, secure, error-free, malware-free or virus-free. Cerebro disclaims any and all liability for the information and disclaims all express or implied warranties, including without limitation, any warranties for information or errors contained in, or omissions from, the information, and the implied warranties of merchantability and fitness for a particular purpose. Cerebro and its employees and officers shall not be liable for any loss or liability suffered by you resulting from the provision to you of such information or your use or reliance in any way on such information. Such information is being provided on an “AS-IS, WHERE-IS” basis and “WITH ALL FAULTS.”