USDA Business & Industry Loans
Guaranteed financing for rural businesses, up to $25 million
Who this is for
Rural Businesses That Need Larger, Longer-Term Financing
USDA Business & Industry (B&I) guaranteed loans finance rural businesses with larger loan amounts and longer terms than many conventional structures allow. INSIGNIA arranges them through participating lenders.
Owner-Operators Buying or Building
Manufacturers, distributors and service companies in rural markets acquiring, building or expanding the facility they operate from.
Buyers of Existing Businesses
Acquirers of rural operating companies who want real estate, equipment and working capital in one structure.
Borrowers Refinancing Debt
Operators carrying short-term, higher-payment or balloon debt who need a longer, fully amortizing structure.
Borrowers Above SBA Limits
Projects larger than SBA programs allow, or sponsors preserving SBA eligibility for another transaction.
How a USDA B&I Guarantee Works
A private lender makes the loan and USDA Rural Development guarantees a portion of it, up to 80%. The guarantee lets the lender offer larger loan amounts, longer terms and fully amortizing payments to rural borrowers that conventional credit boxes often decline. We structure the request, identify lenders that participate in the program, and coordinate the file through USDA review and closing.
Program at a Glance
| Item | Detail |
|---|---|
| Loan amount | Up to $25 million |
| USDA guarantee | Up to 80% of the lender's loan |
| Term | 7 to 30 years, with terms of up to 30 years for real estate |
| Repayment | Fully amortizing monthly payments; no balloon payment |
| Location | Rural areas with fewer than 50,000 inhabitants, excluding the urbanized area contiguous and adjacent to a larger city |
| Eligible borrowers | For-profit businesses, nonprofits, federally recognized tribes, public bodies and individuals |
| Eligible uses | Acquisition, construction, expansion, equipment, working capital, refinancing and owner-occupied commercial real estate |
| Pricing | Set by the lender and varies with credit, structure and market conditions. INSIGNIA does not post rates; benchmark index levels are on the interest rates page |
| Fees and equity | Guarantee fees, annual fees and equity requirements are set under USDA rules and vary by transaction; we confirm them for each request |
Program parameters are summarized from lender program materials and USDA Rural Development guidance and change without notice.
Eligibility and the Rural Test
The property or the business operation must be located in a rural area, which USDA generally defines as a city or town with fewer than 50,000 inhabitants. Many suburban communities fall under that population figure but sit inside the urbanized area contiguous and adjacent to a larger city, and those locations do not qualify. The USDA eligibility tool applies the current census data and returns a determination for a specific address. Enter the full street address, city and ZIP code.
Check the Property, Then Request a Quote
An eligible address is the first qualifier. Once it is confirmed, send us the borrower, the project and the use of proceeds, and we will outline how a guarantee could be structured.
Or call 800-616-2050.
Eligible Uses and Industries
B&I is not an agricultural program. Eligible uses and industries are broad, subject to USDA and lender underwriting.
Eligible uses
- Purchasing or building real estate
- Buying an existing business
- Expanding operations
- Acquiring machinery and equipment
- Funding working capital
- Refinancing debt
Eligible industries
- Manufacturing
- Food processing
- Hospitality
- Retail
- Entertainment venues
- Construction
- Waste removal
- Plant nurseries
- Owner-occupied commercial real estate
- Healthcare
Project costs for ground-up construction can also qualify. Rural healthcare operators can compare B&I with other programs on the healthcare facility financing page.
USDA B&I vs. SBA 7(a) and SBA 504
| Factor | USDA B&I | SBA 7(a) | SBA 504 |
|---|---|---|---|
| Location | Rural areas only | Nationwide | Nationwide |
| Size ceiling | Up to $25 million | Up to $5 million | SBA debenture up to $5 million, or $5.5 million for certain manufacturing and energy projects, alongside a bank first lien |
| Structure | USDA guarantees up to 80% of a lender's loan | SBA guarantees a portion of a lender's loan | Bank first lien plus a second-lien debenture issued through a Certified Development Company |
| Working capital | Eligible | Eligible | Not eligible |
| Owner occupancy | Property may be under 51% owner-occupied if used more than 50% for non-residential business purposes | At least 51% owner-occupied for existing buildings and 60% for new construction | At least 51% owner-occupied for existing buildings and 60% for new construction |
B&I tends to fit where SBA programs do not: loans above SBA size limits, properties that fall short of SBA occupancy tests, borrowers who have used or want to preserve their SBA eligibility, and borrowers who do not meet the SBA test for credit unavailable elsewhere. Where SBA is the better fit, see SBA 504 and 7(a) loans. For a broader view, the loan programs comparison and the capital sources page show leverage, term and recourse across every program we arrange.
When B&I Is Not the Best Fit
- The property sits in an urbanized area or a city or town above the population threshold
- The loan is small enough that an SBA 7(a) loan would close faster with less documentation
- The transaction is passive investment real estate with no operating business; see bank loans, credit union loans or bridge loans
- The timeline is tight, because USDA review adds a step that conventional bank loans do not have
- The borrower is a public body or nonprofit financing an essential community facility; see USDA Community Facilities loans
The USDA B&I Financing Process
- Eligibility review. We confirm the location, the borrower and the use of proceeds against program rules.
- Structuring and lender selection. We size the loan, test equity and collateral, and select a participating lender whose credit box fits the request.
- Underwriting package. We organize financials, projections, the project budget and collateral documentation to the lender's standards before submission.
- USDA review and closing. The lender submits the request to USDA Rural Development, and we coordinate the file through the guarantee, closing and funding.
Information Needed to Evaluate a Request
- Three years of business financial statements and tax returns, plus current interim statements
- A schedule of existing debt, including balances, rates, maturities and collateral
- The project budget with sources and uses, and the purchase contract or construction budget
- Property address, appraisal or valuation information and environmental information where available
- Owner and guarantor personal financial statements
- A business plan or narrative describing operations and the expected effect on local employment
Frequently Asked Questions
What is a USDA B&I loan?
The Business & Industry guaranteed loan program is administered by USDA Rural Development. A private lender makes the loan and USDA guarantees a portion of it, up to 80%, which supports larger loan amounts and longer terms than many conventional structures offer.
Is the program only for agricultural businesses?
No. Manufacturing, hospitality, retail, healthcare, food processing, construction and owner-occupied commercial real estate are among the eligible business types, provided the operation is in a rural area.
How is rural defined?
Generally, a city or town with fewer than 50,000 inhabitants, excluding the urbanized area contiguous and adjacent to a larger city. The USDA eligibility tool gives a determination for a specific address.
How large can a B&I loan be?
Up to $25 million. The practical limit depends on the lender, the borrower's credit and the project.
What terms are available?
Terms generally run from 7 to 30 years, with up to 30 years for real estate. Loans amortize monthly and carry no balloon payment.
Can a B&I loan refinance debt or fund an acquisition?
Yes. Debt refinancing and business acquisition are eligible uses, subject to USDA and lender underwriting.
Who can apply?
For-profit businesses, nonprofits, federally recognized tribes, public bodies and individuals, provided the loan funds are used in an eligible rural area.
Is financing available in every state?
INSIGNIA does not conduct business in Alaska, Arizona, Maine, Minnesota, Nebraska, Nevada, North Dakota, South Dakota and Vermont.
This page summarizes the USDA B&I guaranteed loan program for informational purposes and is not an offer of financing. Program terms, fees and eligibility are set by USDA Rural Development and change without notice. All loans are subject to lender and USDA approval.
Request a Quote for Your Rural Project
Tell us about the business, the property and the rural location, and we will outline how a USDA guarantee could fit.
Why Our Clients Choose Us
INSIGNIA arranges commercial real estate and business financing for lower-middle market owners and investors, with a focus on clear diligence and closing certainty.
Performance
We package each request to the lender's underwriting standards before it is submitted.
Specialization
Government-guaranteed, owner-user and commercial real estate financing are core parts of our practice.
Transparency
We provide a transparent engagement, diligence and closing process.
Certainty
Capitalize on more opportunities with greater certainty of execution.
Contact Us
The team at INSIGNIA Financial Services is available to discuss your financing needs and answer any questions you may have.
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