USDA Business & Industry (B&I) loans are a federal loan program designed to support businesses in rural communities across the United States. Administered by the U.S. Department of Agriculture, the B&I program encourages lenders to finance rural businesses by guaranteeing a significant portion of each loan – 85% for loans under $5 million, 80% for loans of $5 million or more. This significantly lowers the lender’s exposure, which in turn opens the door for borrowers who might not qualify for conventional financing.
The B&I program was established in 1972 and has since become one of the most important financing tool for rural economic development. With loan amounts up to $25 million and terms as long as 40 years, B&I loans offer a combination of scale and flexibility that few other loan programs can match.
Loan Amount
Up to $25,000,000
Down Payment
Minimum (and typical) down payment of 10%
Interest Rate
Either variable or fixed, with rates usually between prime + 1 and Prime + 3
Term
40 year maximum
Collateral
Must be fully collateralized
Personal Guarantee
A full personal guarantee is required
Amortization
Fully amortized
Prepayment Penalty
Treated the same as a conventional loan, can vary
Fiscal Year 2024
176
B&I Loans Approved
$1.4 Billion+
Total Value of Approved B&I Loans
Valid Uses of Proceeds
B&I loans support a broad range of business purposes. Borrowers commonly use them for purchasing commercial real estate, acquiring an existing business, funding new construction or renovations, buying equipment, refinancing existing debt, or securing working capital.
Business Eligibility
The B&I program is open to nearly any type of for-profit business, as well as certain nonprofits, operating in a USDA-eligible rural area. Common industries include hospitality (hotels, motels, and bed & breakfasts), food service, retail, fuel and convenience, self-storage, and light manufacturing.
Because the program falls under the USDA, there’s a natural question about farming. However, B&I loans are specifically for non-agricultural business and industry. Farming operations are not eligible. That said, businesses that add value to agricultural products (such as food processing or packaging operations) do qualify.
Location Eligibility
USDA B&I loans are only available in areas the USDA classifies as ‘rural’, but that definition is broader than most people expect. It includes any area that is not part of a city with a population over 50,000 or its immediately surrounding urbanized zone. In practice, this means many small cities, towns, and suburban areas qualify.
The USDA provides an interactive eligibility map where you can check whether a specific address falls within an eligible area.
