The U.S. Department of Agriculture (USDA) announced May 21 that it is making available up to $1 billion in loan guarantees “to help rural businesses meet their working capital needs during the coronavirus pandemic.”
Agricultural producers who are not eligible for USDA Farm Service Agency loans may receive funding under USDA’s Business & Industry (B&I) CARES Act Program provisions, which were included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, USDA said.
In addition to expanding eligibility to certain agricultural producers, the changes announced this week enable USDA to:
- Provide 90 percent guarantees on B&I CARES Act Program loans;
- Set the application and guarantee fee at 2 percent of the loan;
- Accept appraisals completed within two years of the loan application date;
- Not require discounting of collateral for working capital loans; and
- Extend the maximum term for working capital loans to 10 years.
B&I CARES Act Program loans are required to be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic, USDA said, and the loans may be used only to support rural businesses that were in operation as of Feb. 15, 2020.
USDA said it is developing application guides for lenders and borrowers. The agency also will host two webinars on the program – on May 27 and on June 3.