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USDA Offers Zero Interest Loans to Rural Utilities for Economic Development

Kelly K. Clark
Carson City
Release Date

Acting Assistant to the Secretary for Rural Development Joel Baxley today announced that USDA is seeking applications for grants to promote rural economic development and job creation projects.

The grants are being provided through USDA’s Rural Economic Development Loan and Grant Program. USDA provides grants to local utility organizations which use the funding to establish revolving loan funds (RLF). Loans are made from the revolving loan funds to projects that will create or retain rural jobs. When the revolving loan fund is terminated, the grant is repaid to USDA. Eligible applicants include eligible nonprofit utilities and current or former Rural Utilities Service borrowers who have repaid an insured, director or guaranteed loan.

Earlier this year in Nevada, USDA announced a $1 million REDLG to Mount Wheeler Power, which will be relent to White Pine County to help fund construction of a new White Pine Justice Court in Ely.

USDA provides zero-interest loans to utilities which, in turn, relend the funds to a  local community through a revolving loan fund. The goal is to support rural business start-ups or expansion projects that create rural jobs, and priority is given to rural areas with populations of 50,000 or less. The maximum loan is $2 million; the loan term is 10 years at zero percent.  

The maximum grant is $300,000, which is strictly a revolving loan fund.  Grants require a 20% match from the intermediary or grant recipient. Grants must be repaid to the USDA upon termination of the revolving loan fund.

The grants can be used for business startup costs; business expansion; business incubators; technical assistance feasibility studies; advanced telecommunications services and computer networks for medical, educational, and job training services; and community facilities projects for economic development. 

USDA encourages applications that will support recommendations made in the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity (PDF, 5.4 MB) to help improve life in rural America.

Applicants are encouraged to consider projects that provide measurable results in helping rural communities build robust and sustainable economies through strategic investments in infrastructure, partnerships and innovation. Key strategies include:

• Achieving e-Connectivity for Rural America
• Developing the Rural Economy
• Harnessing Technological Innovation
• Supporting a Rural Workforce
• Improving Quality of Life
 Application deadlines are First Quarter, Sept. 30, 2019; Second Quarter, Dec. 31, 2019; Third Quarter, March 31, 2020; and Fourth Quarter, June 30, 2020. Applications are due by 4:30 p.m. local time at the Rural Development state office where the project will be located. For a list of offices, visit the state office website..

See page 34333 of the July 18, 2019, Federal Register for additional information.