USDA Business and Industry loan guarantees
A loan from a bank or other lender, with up to 85% guaranteed by USDA Rural Development, for businesses, cooperatives and others whose project is in a rural area. Up to $25 million, for up to 40 years, for buildings, equipment, buying a business and more.
- Secured on assets
How it works
USDA Rural Development does not lend the money. It guarantees part of a loan made by a bank, credit union, Farm Credit bank or other approved lender, which makes the lender more willing to lend to a rural project. You apply through the lender, and the lender applies to USDA, all year round.
- Where: the project must be in a rural area, outside any city or town of more than 50,000 people. The business's headquarters can be in a larger city. USDA's eligibility map shows which addresses qualify.
- Who can borrow: for-profit and nonprofit businesses, cooperatives, federally recognized Tribes, public bodies, and individuals in business. Individual borrowers must be US citizens or permanent residents. The money must stay in the US and the project must mainly create or save jobs for rural residents.
- Uses: starting, expanding, repairing or modernizing a business; land, buildings and infrastructure; machinery, equipment, supplies and inventory; refinancing debt when it improves cash flow and creates jobs; and buying a business when that keeps it running and creates or saves jobs. Not for lines of credit, housing, golf courses, gambling, lending or insurance businesses, and most farming itself.
- Guarantee: for loans approved in fiscal year 2026, 85% for requests under $5 million and 80% for $5 million or more.
- Size and term: up to $25 million in total to one borrower (the Secretary of Agriculture can approve up to $40 million for rural cooperatives that process farm products), for up to 40 years, set by what the money buys and the borrower's ability to repay.
- Interest: agreed with the lender, fixed or variable, and a variable rate may change no more than once a quarter.
- Fees: a guarantee fee of 3% of the guaranteed amount (1% for qualifying projects) and a yearly fee of 0.55% of the guaranteed part of the balance, which the lender pays to USDA, plus the lender's own fees.
- Equity and collateral: an existing business needs at least 10% equity in its balance sheet or in the project, and a new business more. Collateral, discounted by the lender, must at least equal the loan.
- Meat, poultry and seafood processors: USDA's Strengthening Processing for US Ranchers (SPUR) guarantees work like these, under the same rules, for loans to start, reopen, retrofit, expand or improve a meat, poultry or seafood processing plant, in a rural area or a city. Lenders can apply from October 27, 2026 until the money runs out. For fiscal year 2027 USDA guarantees 90% of the loan, the lender keeps at least 10%, and the fees are the same 3% and 0.55%. USDA is making at least $5 billion of these loans available.
The page says preparing an application can take from a few weeks to several months.
Upsides and downsides
Upsides
- Terms of up to 40 years keep payments low on buildings and long-life equipment
- Large loans, up to $25 million, with an 80% or 85% guarantee
- Open to cooperatives and nonprofits as well as businesses
Downsides
- Only for projects in rural areas
- A 3% guarantee fee and a yearly fee on top of the interest
- Collateral must cover the loan, and the paperwork takes weeks to months
- Cannot pay for a line of credit
Risks
- If the business cannot repay, the lender can sell the collateral and pursue anyone who guaranteed the loan
- With a variable rate, payments rise when rates rise
What it costs
- How it is priced
- Interest agreed with the lender, fixed or variable, plus USDA's guarantee fees
- Costs that are easy to miss
- A guarantee fee of 3% of the guaranteed amount (1% for qualifying projects), often passed on to you
- A yearly fee of 0.55% of the guaranteed part of the balance, paid by the lender to USDA
- Appraisals, environmental reviews and hazard insurance on the collateral
Up to $25 million to one borrower, or up to $40 million for some rural cooperatives that process farm products, with the Secretary's approval.
Have a quote? True cost of a loan: work out the APR and total cost
Does it fit?
Could fit when
- Your project is in a rural area and needs long-term money for property, equipment, growth or buying a business
Unlikely to fit when
- Your project is not in a rural area (USDA guarantees are for projects outside towns of more than 50,000 people, with an exception for some local food projects; USDA's SPUR guarantees for meat, poultry and seafood processing plants are open in cities too)
- You need more than $25 million
- The business is a farm or ranch (these guarantees do not cover most farming itself, though nurseries, forestry and aquaculture can qualify; USDA's farm loans are for farms)
- You only need a revolving line of credit, which this program does not cover
- You need the money within days or weeks
Who can use it
- Business types: Sole proprietorship, Partnership, LLC, S corporation, C corporation, Benefit corporation, Cooperative, Nonprofit
- The project is in a rural area, outside any city or town of more than 50,000 people
- Individual borrowers are US citizens or permanent residents; the money stays in the US
- The project mainly creates or saves jobs for rural residents
- At least 10% equity for an existing business, and more for a new one
Not available for: Lending, investment and insurance companies; Golf courses, racetracks and gambling; Housing, owner-occupied or rented; Churches and fraternal organizations; Farming itself, except in some vertically integrated businesses (commercial nurseries, forestry and aquaculture are eligible).
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all government-backed and community lending
0%
0 of 5 ticked
- Rural address checked
- Financial statements
- Equity in the project
Regulation and protections
Regulators: U.S. Department of Agriculture (USDA); Consumer Financial Protection Bureau (CFPB).
Who runs it: Federal program.
USDA's rules (7 CFR part 5001) set the guarantee, the fees, the longest term and who can borrow. The Equal Credit Opportunity Act (Regulation B) covers business credit: if your business had sales of $1 million or less last year, the lender must tell you its decision within 30 days of a complete application and, if it turns you down, give you the reasons or tell you how to ask for them.
Federal Truth in Lending rules (Regulation Z) do not cover business loans, so ask for the rate, fees and total cost in writing.
Types of provider: Banks, savings associations, credit unions and Farm Credit banks, and other lenders USDA approves.
Also consider
What has changed
- Added USDA's new SPUR loan guarantees for meat, poultry and seafood processing plants, open from October 27, 2026 in rural areas and cities: a 90% guarantee for fiscal year 2027, with the same fees.
- The fit finder now holds this route back for farms and ranches, since the program does not cover most farming itself, and points them to USDA's farm loans.
Sources
- USDA Rural Development: Business and Industry Guaranteed Loan · checked October 20, 2026
- Federal Register: Strengthening Processing for US Ranchers (SPUR) Guaranteed Loan Program, notice of funding opportunity and fees for fiscal year 2027 (October 27, 2026), on govinfo · checked November 1, 2026
- 7 CFR part 5001: OneRD guaranteed loans (loan limits, equity, eligibility) · checked October 20, 2026
- 12 CFR 1002.9 (Regulation B): notifications, including to business credit applicants · checked October 17, 2026
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