U.S. Secretary of Agriculture Sonny Perdue today announced that the agency 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.
“Our business program staff is working virtually to continue delivering our services and supporting our rural customers,” said Puerto Rico State Director, Josué E. Rivera.
“This program is very important for our island rural businesses and farmers to overcome the impacts of not only the hurricanes, earthquakes, but now the COVID-19,” he said.
In addition to expanding eligibility to certain agricultural producers, the changes that Perdue announced 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 two 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 coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.
USDA intends to consider applications in the order they are received, agency officials said.
However, the agency may assign priority points to projects if the demand for funds exceeds availability,” they said.
Program funding expires Sept. 30, 2021. Eligible applicants may contact their local USDA Rural Development office.
The USDA confirmed it is developing application guides for lenders and borrowers on the B&I CARES Act Program. The Agency also will host two webinars to provide an overview of program requirements: on May 27 at 3:30 p.m. and June 3 at 2 p.m.