Business and Industry Program For starting or expanding rural businesses and cooperatives Reduces risk to lenders and raises their lending limits Guarantees to local lenders 80% up to $5 million 70% up to $10 million 60% up to $25 million
Business and Industry Guaranteed Loans Loans are Made by Eligible Lenders Uses of loans: –Equipment –Construction –Working capital –Refinancing in Certain Situations
Provides Grants to: Public Bodies (Cities) Non-Profits, Tribes All Serving Rural Areas Rural Business Enterprise Grant Grants can finance small and emerging private businesses and cooperatives, provide technical assistance or fund a revolving loan program Commonly requests are $99,000 or less have higher priority
Rural Business Opportunity Grants (RBOG) Eligible applicants: tribes, nonprofits, public bodies Purposes: –Identify and analyze business opportunities –Provide TA to existing or prospective entrepreneurs –Conduct local or multi-county Econ. Dev. Planning –Conduct leadership training –Pay for professional services for planning or training. Priority scoring: Applications under $50,000
Zero Percent Interest Loans may be made to RUS Borrowers (Electric or phone Coops) Supplemental Funding of at Least 20% of the Zero Percent Interest Loan is Needed $740,000 Maximum Loan Rural Economic Development Loan
Revolving Loan Fund (RLF) Established by Electric or Telephone Coop Funding for Community / Medical Facilities and Education Facilities $300,000 Maximum Per Project Rural Economic Development Grant
Value Added Producer Grants (VAPG) Eligible: Individuals, LLC, LLP, For-Profits, or Non- Profits that are owned or controlled by Ag Producers Funding under a NOFA (Deadline) ( likely due in mid July) Planning Grant $100,000 Working Capital $300,000. There is a $1 to $1 match requirement Must be a change in the physical state of the product
Sec. 9007: Rural Energy for America Program Grants and Loan Guarantees for Farmers, Ranchers, and Rural Small Businesses
Section 9007 Renewable Energy and Energy Efficiency Improvement Purchase renewable energy systems (A system that produces or produces and delivers usable energy from a renewable energy source) Energy Efficiency Improvements (Improvements to a facility or process that reduce energy consumption)
RE/EE Program Overview Section 9007 – Cost Sharing –The amount of the grant shall not exceed 25% of the eligible cost of the activity funded. –The combined loan and grant made or guaranteed shall not exceed 75% of the eligible cost of the activity funded. –Only post-application costs eligible.
What Small Businesses are Eligible? A private entity including a sole proprietorship, partnership, corporation, & cooperative Citizenship Visit http://sba.gov/size/index.html for meeting the size definition.http://sba.gov/size/index.html –NOTE: Public or private non-profits are not eligible.
What Agricultural Producers Are Eligible? Must directly engage in production of agricultural products. At least 50% of gross income must be from agriculture production. Citizenship.
Solar Powered Stock Tanks in the Powder River Basin: A Renewable Energy System for Livestock Producers Solar Energy Wind Energy
Geothermal – Direct Use A system that uses thermal energy directly from a geothermal source –At high temperatures, can directly heat water or buildings –At lower temperatures, temperature difference between earth and air can heat and cool buildings Hydrogen A renewable energy system that produces hydrogen or a renewable energy system that uses mechanical or electric power or thermal energy from a renewable resource using hydrogen as an energy transport medium.
2 projects funded in SD in FY 07 7 projects funded in SD in FY 08 28 projects funded in SD in FY09 40 projects funded in SD in FY10 Energy Efficiency Improvements Grain Bin Dryer Replacement
Energy Efficiency Improvements Irrigation Pump Replacement South Dakota 3 projects Example: The project replaced an old, inefficient diesel motor with a new electric, more efficient motor on an irrigation well.
Application Deadline Funding hasn’t been announced yet, but we’re expecting it in March. We encourage applicants to file early. $407 million funding in FY10 ($20 mm grants) $60 million funding in FY09 $35 million funding in FY08 $23 million in FY07 Contact Rural Development office nearest you to start the application process. Get a firm bid on the equipment Talk to your banker about the guaranteed loan.
Intermediary Relending Program Eligible applicant: non profits, Tribes, public agencies Purpose: start a revolving loan fund Rates & Terms – 1% for 30 years to the intermediaries and they relend Deadline to apply: quarterly
502 Single Family Housing Program 502 Direct Housing Loans are at 100% financing for low & very low income families. Guaranteed Loans are at 100% financing for households with higher incomes.
Benefits of the SFH Program No down payment. Generous ratios of 29% PITI and 41% TD. Closing costs can be financed.
Guaranteed Loan Program Guidelines Available to families or persons whose incomes at time of initial occupancy do not exceed 115 percent of Median Household Income. Up to 90 percent Guarantee.
504 Single Family Housing Program Loans or grants for elderly single family home owners 62 years of age or old. Loans are at 1% interest rate for 20 years with a maximum amount of $20,000. Maximum grant amount is $7,500 life time.
Multi-Family Housing Program Rural Rental Housing Direct Loans Section 515. MFH in communities of 20,000 population or less. Rental Subsidies available to low income tenants. Housing built with 515 loans is for families, people 62 years of age or older, and people with disabilities. Serves mostly low income families.
Multi-Family Guaranteed Loans Section 538 Guarantee loans by conventional lenders for affordable rental housing. Aimed at low to moderate income tenants. Develop affordable rental housing in rural areas (20,000 and less) through use of loan guarantees combined with risk sharing partnerships of public and private lenders. 90% guarantee
Water and Environmental Program Direct and guaranteed loans and grants to install, expand, and improve water and wastewater systems, solid waste disposal, and storm sewers. In towns under 10,000 population.
Applicant Eligibility Public Body, town or county Not for profit organization Associations Indian Tribes
Drinking Water Projects New Rural Water System Rural Water Extensions & Upgrades Water Storage Tanks Water Treatment Plants
Sanitary Sewer Projects New Sewer Systems Sewer System Extensions Wastewater Treatment Plant Improvement
Water & Environmental Programs Terms – up to a 40 year loan or useful life of the security Rates – usually around 4.0 to 4.5%
WEP Grants… Grant funds are limited. MHI Below $33,795 –Project is necessary to alleviate a health or sanitary problem then MHI needs to be at 80% of MHI. Pre Development Planning Grants –max. $20,000 (not to exceed 75% of cost) –80% of MHI
Community Facilities Program Direct and guaranteed loans, and grants, to public entities, Indian tribes, and nonprofits. Improve the economic and environmental climate of rural communities. Examples: Health Care – hospitals, clinics, nursing homes; Public Services – adult & child care, airports, schools, libraries; Public Safety – police & fire stations, vehicles, jails.
Community Facilities Guaranteed Loans Community facilities - such as health care clinics, assisted living facilities, police and fire stations, and schools -are essential to the quality of life in rural communities Work with local lenders - to offer loan guarantees 90% guarantee Banks rates & terms
Community Facility Direct Loans Fixed Interest Rates usually around 4.5% Up to 40 Year Terms Available in communities under 20,000 population.
Community Facilities Grants Grants used to assist lower income rural areas in developing essential public community facilities Very modest funding available in normal yearly funding - $150,000 –06/01/2011 usual deadline to request funds from National Office FY 2011 special Economic Impact Initiative grants for qualified counties based on unemployment and poverty levels (not sure of funding).
Are you CF Grant Eligible? Factors the agency considers –Available resources –Cash flow /budget –Median Household Income Kadoka, SD – MHI is $26,875 so 35% eligible Jackson County MHI is $23,945 so up to 55% eligible Belvidere, SD – MHI is $26,250 up to 35% eligible Consider service territory of who will be served