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USDA Rural Development

Small business has big potential with a USDA Rural Development loan

Stearns Bank is a USDA Multi-State Lender, a distinction earned by a select group of banks. Your financing project will be handled efficiently by our expert lending staff. Our experience with government loan programs ensures that issues are resolved promptly and agency requirements are satisfied. We are a full-service bank and can lend anywhere in the country.

Contact a USDA Loan Expert

USDA Rural Development Loan from Stearns Bank

Rural Roots, Personal Service

Stearns Bank was founded in rural Minnesota. We have financed small business growth and revitalized rural areas for decades through USDA lending. We remain focused on economic growth, job creation and vitality through industry and economic development in rural America.

We’ll personally get to know you and your project. With creativity and a sense of urgency, we will develop customized financing solutions that fit your needs and timeline.

See our blog: USDA Rural Development Loan: Right Financing Fit for Your Project?

Contact a USDA Loan Expert

USDA rural development loan for rural communities

Determining Eligibility

USDA Multi-State Lender for USDA rural development loans

USDA lending is designed to help rural businesses access capital, stimulate rural economies and create and preserve jobs. As a USDA Multi-State Lender, Stearns Bank can process your USDA loan directly with federal agencies. This enables us to move fast and avoid delays at the local level.

Whether you’re expanding, relocating, starting new or exploring renewable options, you can determine your USDA loan eligibility on the USDA Rural Development eligibility and mapping tool.

USDA Rural Development Loan eligibility map and tool

Green Energy, Clean Energy

USDA REAP financing for renewable power

If you are considering solar or wind to power your rural business or manufacturing plant, contact Stearns Bank. Our lenders are experienced with renewable energy projects, and can determine the best type of loan for your needs. Depending on your business needs and goals, we can get you started with a USDA or SBA loan, or standard commercial financing.

See our blog: USDA REAP for Solar, Wind and Renewable Energy Financing

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USDA Renewable Energy for America Program

USDA Lending Programs

Stearns Bank is recognized for our experience in government rural financing programs and will work effectively with all parties to manage the financing approval process on your timeline. The USDA is committed to growing investments in rural America through the OneRD Guarantee Loan Initiative.

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Business & Industry

Financing for rural businesses in cities with a population of less than 50,000, including for-profit, nonprofits, co-ops, federally recognized tribes and public bodies.

Rural Energy America Program (REAP)

Provides financing to agricultural producers and rural small businesses to purchase or install renewable energy systems or make energy efficiency improvements.

Community Facilities

Provides financing to develop community facilities – those that provide essential services to the local community within a primarily rural area.

Water and Waste Disposal

Provides financing to improve access to clean, reliable water and waste disposal systems for households and businesses in rural areas.


"With roots in rural Central Minnesota and a nationwide presence, Stearns Bank is committed to economic growth in rural communities throughout the U.S. Our designation as a USDA Multi-State Lender demonstrates our vast experience in USDA lending and delivers incredible efficiency and speed throughout the lending process."

Kelly Skalicky
Stearns Bank President and CEO


The Stearns Bank Difference

  • Check markNational USDA Multi-State Lender
  • Check markPersonal service, collaborative approach
  • Check markCreative solutions, flexible process
  • Check markFull-service bank - deposits, cash management, equipment financing
  • Check markExperience in small business and rural communities
  • Check markFast decisions and prompt answers

Small Business Matters

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Farmers and ranchers may be able to get a loan through the Farm Service Agency (FSA). This blog breaks down the loan types under three FSA programs.

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Frequently Asked Questions (FAQ)

What is the USDA OneRD program?

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:

What is considered “rural” for a USDA loan?

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.

What is the approval process for a USDA rural development loan?

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.

Are there borrowing restrictions for loan guarantees?
  • 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.
What is the REAP program?

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.

Who is eligible to apply for a REAP loan?
  • Agricultural producers with at least 50 percent of their gross income coming from agricultural operations.
  • Small businesses in eligible rural areas.
How can funds be used in the REAP program?

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
  • Small and large wind generation
  • Small and large 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.

What is the Business & Industry loan program?

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

Who may apply for a Business & Industry loan?
  • For-profit or non-profit businesses
  • Cooperatives
  • Federally recognized Native American tribes
  • Public bodies
  • Individuals engaged or proposing to engage in a business
What is considered an eligible area for a Business & Industry Loan?
  • 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.
How can a Business & Industry loan be used?

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.
What types of financing are NOT allowed with a Business & Industry loan?
  • 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.
What are collateral requirements for a USDA Rural Development loan?

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).

How do I get started?

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.

BusinessSmart checking and market savings from Stearns Bank

Banking That Pays

Checking and savings accounts

Reach your business checking and savings goals faster with simple, smart and rewarding BusinessSmart™ accounts. Earn interest and cash back with the convenience of online and mobile banking.

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USDA Rural Development Finance Team

Get in touch with David Feriancek
David Feriancek
SVP National Lending
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Get in touch with Tom Ethen
Tom Ethen
VP Commercial Lending
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Get in touch with Victoria Freeney
Victoria Freeney
Commercial Lender
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