$100M available with USDA loan guarantees

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The Business & Industry Loan Guarantee program

The B&I program provides loan guarantees for expansion and preservation of jobs in rural areas.  The program can provide development credit in rural areas and towns of 50,000 or less.  Jobs produced in this manner will help people stay in their own communities and raise their standard of living in the rural environment.  The program provides guarantees to commercial lenders who make credit available to establish or maintain businesses.  Loan funds may be used to purchase land, buildings and equipment; working capital; and in some cases to refinance debt.  Eligible entities include corporations, partnerships, cooperatives, individuals, federally recognized Indian Tribes and other legal entities.  (from their website)

Update – From a recent (10/27/2009) USDA email

Over $100 million in Business & Industry loan guarantee funding is available for Ohio for FY 2010.  Between USDA’s 2010 budget, disaster funding, and American Recovery and Investment Act (ARRA) funding, Ohio has a goal of $100 million in business loan guarantees this year.

90% guarantees with 1% fee available

No renewal fee on ARRA funded loans.

The secondary market has returned for loan guarantees.  Premiums are available also.  Large servicing fees are possible as some variable loan guarantees are being purchased at 2% under prime.  Purchase prices on fixed interest rates were available last week at 4.23% for 7 years, 5.44% for 15 years, and 5.75% for 20 years.

If you offered your customers long term fixed interest rates at 7% or below, would you gain some new business?   Your ROI could be at least 25% on the same loan, depending upon terms available at the time of sale, all the while improving liquidity and soothing the nerves of your regulators.

For more information, feel free to contact any of our staff or contact Jim Cogan at 614-255-2420.

>> Ohio USDA Rural Development

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