Grow With USDA Rural Business Loans

USDA OneRD is comprised of four lending programs, enabling businesses and entrepreneurs to work with private lenders, such as Stearns Bank N.A., to invest in rural businesses and grassroots rural economic development.

The four lending programs are:

• Business and Industry Loan Guarantee Program
• Rural Energy for America Guaranteed Loan Program
• Water and Waste Disposal Guaranteed Loan Program
• Community Facilities Guaranteed Loan Program

The USDA defines rural areas as “any area, other than a city or town that has a population of greater than 50,000 inhabitants, and the urbanized area contiguous and adjacent to such a city or town.”

Agricultural producers may be in rural or non-rural areas. See the USDA map for eligible business locations. 

Start by contacting a Stearns Bank lender so we can discuss your business objectives and walk you through the process. As a USDA Multi-State Lender, we have a direct channel to the federal agency. This ensures your loan will receive prompt consideration, with no delays at the state or local level.

The Stearns Bank lending team is experienced with government guaranteed loan programs. We will make sure your application meets all agency requirements. We will respond promptly to questions and work in your interest to ensure successful loan approval and funding within your timeline.

• Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.
• Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

The REAP program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Agricultural producers may also apply for new energy efficient equipment and new system loans for agricultural production and processing.

• Agricultural producers with at least 50 percent of their gross income coming from agricultural operations.
• Small businesses in eligible rural areas.

Funds may be used for renewable energy systems, such as:

• Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels)
• Geothermal for electric generation or direct use
• Hydropower below 30 megawatts
• Hydrogen
• Wind generation
• Solar generation
• Ocean (tidal, current, thermal) generation

Funds may also be used for the purchase, installation and construction of energy efficiency improvements, such as:

• High efficiency heating, ventilation and air conditioning systems (HVAC)
• Insulation
• Lighting
• Cooling or refrigeration units
• Doors and windows
• Electric, solar or gravity pumps for sprinkler pivots
• Switching from a diesel to electric irrigation motor
• Replacement of energy-inefficient equipment

Agricultural producers may also use guaranteed loan funds to install energy efficient equipment and systems for agricultural production or processing.

The Business & Industry loan program promotes rural economic development and job creation, by making investment capital available to rural businesses and other organizations.

• For-profit or non-profit businesses
• Cooperatives
• Federally-recognized Native American tribes
• Public bodies
• Individuals engaged or proposing to engage in a business

• Rural areas not in a city or town with a population of more than 50,000 inhabitants.
• The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible rural area.
• The lender may be located anywhere in the United States.
• Projects may be funded in either rural or urban areas under the Local and Regional Food System Initiative.
• Check eligible addresses for Business & Industry programs.

Eligible uses for a Business & Industry loan include (but are not limited to):

• Business conversion, enlargement, repair, modernization or development.
• The purchase and development of land, buildings and associated infrastructure for commercial or industrial properties.
• The purchase and installation of machinery and equipment, supplies or inventory.
• Debt refinancing when such refinancing improves cash flow and creates jobs.
• Business and industrial acquisitions when the loan will maintain business operations and create or save jobs.

• Lines of credit.
• Owner-occupied and rental housing.
• Golf courses or golf course infrastructure.
• Racetracks or gambling facilities.
• Churches or church-controlled organizations.
• Fraternal organizations.
• Lending, investment and insurance companies.
• Agricultural production, with certain exceptions.
• Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower.

Collateral must have documented value sufficient to protect the interest of the lender and the Agency. Lenders will discount collateral consistent with sound loan-to-value policy with the discounted collateral value at least equal to the loan amount. The lender must provide satisfactory justification of the discounts being used. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).

Contact Stearns Bank. We will discuss your project and review your business plan. Together we can determine the best type of financing for your situation and goals. If a USDA rural development loan is appropriate for financing your project, we will initiate the process.

As a USDA Multi-State Lender, we are familiar with USDA requirements and we have direct channel to the federal agency. This helps ensure an efficient review and approval process, with no delays or setbacks. Our personal service gives you confidence that each step of your loan approval process is handled with attention to detail.

Subject to credit approval/qualification.
Terms, conditions and closing costs may apply.
USDA policies may differ from Stearns Bank N.A.