USDA Rural Economic Development Loan and Grant Program


To promote rural economic development and job creation projects.

Applicant Eligibility

  • Rural Utility Service (RUS) Electric and Telephone utility borrowers only.
  • Financially sound organization.
  • Current on all Federal debts.

Use of Loan Funds

  • Business expansions and start-up venture costs, including, but not limited to, fixed assets, real estate, buildings, equipment, or working capital
  • Business incubators
  • Community development assistance to nonprofits and public bodies (particularly for job creation or enhancement)
  • Facilities and equipment to educate and train rural residents to help economic development
  • Facilities and equipment for medical care for rural residents
  • Technical assistance

Maximum and Minimum Loan Amounts

  • Maximum $2,000,000 ($300,000 grant maximum, requires 20% match from cooperative).
  • Minimum $10,000.

Loan Terms and Repayment

  • Zero-interest loan provided to the RUS borrower on a pass-through basis to the ultimate recipient (project owner).
  • Maximum 10 year repayment period.
  • Payments may be deferred up to two years.
  • Repayment by the ultimate recipient may not be more restrictive than the repayment schedule of the RUS borrower.
  • Minimum 20% supplemental financing required of ultimate recipient.


Application Process

  • Meet with your local cooperation and fill out a pre-application form.
  • Applications are submitted to the cooperative board for approval before being sent to the local USDA field representative.
  • Applications are forwarded to the USDA Rural Development National Office for selection on a national competitive basis.
  • Applications are reviewed quarterly.

Selection Factors

  • Nature of the project.
  • Job creation projections.
  • Long-term improvements in economic development.
  • Diversifying the rural economy or alleviating underemployment.
  • Supplemental funds.
  • Economic conditions and job creation.
  • Unemployment rates.
  • Per capita personal income.
  • Change in population.
  • Number of long-term jobs.
  • Community-based economic development program.
  • Plan for improving the marketable skills of people in rural areas.
  • Location (rural).
  • Support for program - cushion of credit payments.
  • Demonstration project.
  • Probability of success.
  • Ownership and management of the project.
  • Ultimate recipient’s business plan.
  • Completeness of application.

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