With many rural businesses and agricultural producers facing financial challenges as a result of COVID-19, the Department of Agriculture today announced that it will make available up to $1 billion in loan guarantees for these entities through Farm Service Agency loan programs and through the USDA Business and Industry CARES Act Program, a new program that provides working capital loans to help rural businesses prevent, prepare for or respond to the effects of the pandemic.
Under these changes, agricultural producers that are not eligible for FSA programs will be eligible for B&I CARES Act Program loans. Additionally, USDA said it will provide 90% guarantees on B&I CARES Act Program loans and extend the maximum term for working capital loans to 10 years. It will also set the application and guarantee fee at 2% of the loan, accept appraisals completed within two years of the loan application date and not require discounting of collateral for working capital loans. Rural businesses that were operational as of Feb. 15, 2020, may take advantage of B&I CARES Act Program loans.
Loan applications will be considered in the order they are received, though USDA noted that it may give priority to certain projects if the demand for funds exceeds availability. USDA will host two upcoming webinars for borrowers and lenders on the B&I CARES Act program. The first webinar will take place on May 27 at 3:30 p.m. EDT, and the second webinar will be held on June 3 at 2 p.m. EDT.
