This program bolsters the existing private credit structure through the guaranteeing of loans for rural businesses, allowing private lenders to extend more credit than they would typically be able to.
Terms and Qualifications:
- Maximum term on real estate is 30 years.
- Maximum term on machinery and equipment is useful life or 15 years, whichever is less.
- Maximum term on working capital not to exceed 7 years.
- Loans must be fully amortized; balloon payments are not permitted.
- Reduced payments may be scheduled in the first three years.
Maximum amount of loan guarantees:
80% for loans of $5 million or less
70% for loans between $5 and $10 million
60% for loans exceeding $10 million, up to $25 million maximum
U.S. Department of Agriculture – USDA; Office of Rural Development