On May 22, the U.S. Secretary of Agriculture announced the Rural Business-Cooperative Service is making available up to $1 billion in loan guarantees to help rural businesses meet their working capital needs during the coronavirus pandemic. Additionally, agricultural producers that are not eligible for USDA Farm Service Agency loans may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In addition to expanding eligibility to certain agricultural producers, the changes will allow USDA to:
– Provide 90% guarantees on B&I CARES Act Program loans;
– Set the application and guarantee fee at 2% of the loan;
– Accept appraisals completed within 2 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 must be used as working capital to prevent, prepare for or respond to the effects of the pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on February 15, 2020. USDA announced the expanded B&I authorities in a notice published in the May 22 Federal Register (p. 31035). USDA is developing application guides for lenders and borrowers on the B&I CARES Act Program.
USDA intends to consider applications in the order they are received. However, the Department may assign priority points to projects if the demand for funds exceeds availability. The Department will begin accepting applications for B&I loan guarantees on May 22. Applications must be received no later than midnight Eastern Daylight Time on June 22, 2020, or until the funds are expended. The program funding expires September 30, 2021.
USDA will host two webinars to provide an overview of program requirements, as follows:
Lenders Webinar Wednesday, May 27, 3:30 pm Eastern Time. To register: globalmeet.webcasts.com/starthere.jsp?ei=1322642&tp_key=7a700acddd
Stakeholders & Public Webinar Wednesday, June 3, 2:00 pm Eastern Time. To register: globalmeetwebinar.webcasts.com/starthere.jsp?ei=1324161&tp_key=6067315417