Program 101

Are Applications Currently Being Accepted: Yes, applications are accepted quarterly.
 
What does this program do?
This program provides 1 percent low-interest loans to local lenders or “intermediaries” that re-lend to businesses to improve economic conditions and create jobs in rural communities.
 
Who may apply to be an intermediary lender?
The following are eligible:
  • Nonprofits and cooperatives.
  • Federally-recognized tribes.
  • Public agencies.
The following are eligible to apply for a loan from the intermediary lender as an ultimate recipient:
  • Ultimate recipients may be individuals, public or private organizations or other legal entities, given that:
    • Majority ownership is held by U.S. citizens or permanent residents. (1)
    • The applicant owes no delinquent debt to the Federal Government.
    • The applicant is unable to obtain affordable commercial financing for the project elsewhere.
    • The project is located in an eligible rural area - Check Eligibility.
    • The applicant has no legal or financial interest or influence in the work of the intermediary lender.
 
Are there other requirements?
Intermediary lenders must have:
  • The legal authority to operate a Revolving Loan Fund (RLF) (2).
  • A record of successfully assisting rural businesses and communities, normally including experience making and servicing commercial loans.
  • The ability to provide adequate assurance of repayment of the loan.
 
How much funding is available to intermediaries?
  • Up to $2 million for the first financing.
  • Up to $1 million at a time thereafter.
  • Total aggregate debt from all funding may not exceed $15 million.
 
What are the terms for the intermediary lender?
  • The interest rate is fixed at 1 percent.
  • The maximum term is 30 years.
  • nterest-only payments may be permitted for the first three years.
 
What is the maximum loan amount available to ultimate recipients?
  • $250,000 or 75 percent of the total cost of the ultimate recipient’s project for which the loan is being made, whichever is less.
 

Portfolio: No more than 25 percent of an Intermediary Relending Program loan may be used for loans to ultimate recipients that exceed $150,000. This limit does not apply to revolved funds.

 
What are the rates, terms and payment structure on the loan to the ultimate recipient?
These are set by the intermediary lender in an amount sufficient to cover the cost of operating and sustaining the revolving loan fund.
 
How may funds be used?
  • To acquire, construct, convert, enlarge or repair a business or business facility, particularly when jobs will be created or retained.
  • To purchase or develop land (easements, rights of way, buildings, facilities, leases, materials).
  • To purchase equipment, machinery or supplies, or make leasehold improvements.
  • For start-up costs and working capital.
  • For pollution control and abatement.
  • For transportation services.
  • To cover feasibility studies and some fees.
  • Towards the building of hotels, motels, convention centers.
  • For educational institutions.
  • For aquaculture-based rural small business.
  • To establish revolving lines of credit as described in 7 CFR Part 4274.314.
NOTE: ineligible loan purposes are listed in the Code of Federal Regulations 7 CFR Part 4274.319.
 
How can my organization become an intermediary lender?
Each year, Congress provides program funding as called for in the federal budget. If you are interested in becoming a Revolving Loan Fund lender through the Intermediary Relending Program, you are encouraged to contact a USDA Rural Development local office.
 
What is an eligible area?
  • Any area, including a city or town, that has a population of fewer than 50,000 residents.
  • Any urbanized areas contiguous and adjacent to a city or town of 50,000 or more residents may not be eligible.
  • The intermediary borrower’s headquarters may be based within a larger city so long as the project service area is located in an eligible rural area.
  • The intermediary lender may be located anywhere.
 
 
How do we get started?
Please reach out to your state office for additional information and to apply for the Intermediary Relending Program.
 
Who can answer questions?
You can contact an Intermediary Relending Program lender serving your area. You may also contact your local office for assistance.
 
What law governs this program?
  • The Basic Program is governed by the Code of Federal Regulations, 7 CFR Part 4274.
  • The Loan Servicing is governed by 7 CFR Part 1951.
  • This program was originally authorized by the Food Security Act of 1985, Pub L. 99-198 (1985 Farm Bill).
 
Why does USDA Rural Development do this?
The purpose of the Intermediary Relending Program is to alleviate poverty and increase economic activity and employment in rural communities. Under this program, loans are provided to local organizations (intermediaries) for the establishment of revolving loan funds. These revolving loan funds are used to help finance business and economic development activity to create or retain jobs in disadvantaged and remote communities. 
 
Intermediary lenders are encouraged to complement state and regional strategies, and work with other public and private organizations that can provide complementary resources.
 
NOTE: Because citations and other information may be subject to change, please always consult the program Instructions listed in the section above titled ”What law governs this program?” You may also contact your local office for assistance.
 
(1) Individual borrowers must be citizens of the United States (U.S.) or reside in the U.S. after being legally admitted for permanent residence. Corporations or other non-public borrowers must be at least 51 percent owned by persons who are either citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence.
 
(2) A revolving loan fund (RLF) is a pool of public- and private-sector funds that recycles money as loans are repaid (revolved funds). USDA grants or loans may be used to start, replenish and expand RLFs. Eligible recipients are state or local government agencies and nonprofit entities structured to make loans. They must demonstrate economic need and have a plan that both meets program requirements and spurs growth.

Forms & Resources

IRP Intermediary Application Checklist & File Docket Index

RD 4274-1, Application for Loan IRP,

RD4274-2, IRP Project Summary

Environmental Checklist for Categorical Exclusions,

RD 1970-B, Exhibit D

Letter of Recommendation FONSI

RD 1970-C, Exhibit D

Survey on Ensuring Equal Opportunity for Applicants

Forms: 
RD 400-1, Equal Opportunity Agreement

RD 400-4, Assurance Agreement

AD-1047, Certification Regarding Debarment

AD-1049, Certification Drugfree Workplace

RD Inst.1940-Q Exh A-1. Certification for Contracts, Grants & Loans

RD 1910-11, Federal Collection Policies

RD 1940-L, Certification for Request of Funds

 

 

NOTE: If state-specific forms are not shown above, please ensure that your state is selected in the dropdown menu above to find the State Office contact information and speak to a Business Programs Specialist before attempting to fill out any forms or applications. This will save you valuable time in your application.

Interest Rates

For intermediaries, the interest rate is fixed at 1% with a maximum term of 30 years. Interest-only payments may be permitted for the first 3 years.

For the ultimate recipients, the interest rate is set by the intermediary in an amount sufficient to cover the cost of operating and sustaining the revolving loan fund.

Contacts

Rural Business Staff
Jeff Jones, Program Director, 859-224-7436
Scott Maas, Energy Coordinator, 859-224-7319
Dean Tandy, Loan Specialist, 859-224-7303
Cheryl Clay, Loan Specialist, 859-224-7326
Robi Fauser-Fink, Loan Specialist, 859-224-7451