USDA Business & Industry Guaranteed Loan ProgramUSDA Business & Industry Guaranteed Loan Program

Maximum total B&I guaranteed loans per borrower

$25,000,000, including outstanding B&I loans; up to $40,000,000 for rural cooperatives doing value-added processing of agricultural commodities, with approval by the Secretary

ecfr.gov

Guarantor loan limit

$100,000,000

ecfr.gov

Guarantee percentage, FY2026 loans under $5 million

85%

federalregister.gov

Guarantee percentage, FY2026 loans of $5 million to $25 million

80%

federalregister.gov

Guarantee percentage, FY2026 reduced-fee loans

80%

federalregister.gov

Guarantee percentage, FY2026 projects in high-cost, isolated rural Alaska not connected to a road system

90%

federalregister.gov

Regulatory maximum guarantee

90% of eligible loss; the Agency sets the actual percentage each fiscal year by Federal Register notice

ecfr.gov

Initial guarantee fee, FY2026

3.0% standard; 1.0% for reduced-fee projects and isolated rural Alaska projects

federalregister.gov

Guarantee fee calculation

Total loan amount x percentage guaranteed x guarantee fee rate; paid at or before loan closing and before the loan note guarantee is issued; may be passed to the borrower

ecfr.gov

Regulatory cap on the B&I guarantee fee

5%

ecfr.gov

Annual (periodic) guarantee retention fee, FY2026

0.55% standard; 0.50% for reduced-fee projects and isolated rural Alaska projects; charged on the December 31 outstanding principal times the percentage guaranteed; the rate in effect at obligation applies for the life of the guarantee

federalregister.gov

Fee for issuing the loan note guarantee before construction is complete, FY2026

0.50% (only when the lender asks for the guarantee before project completion)

federalregister.gov

Maximum term

40 years, limited to the useful life of the project or collateral and any State law limit

ecfr.gov

Interest rate

Negotiated between lender and borrower; fixed, variable or combined; variable rates tied to a published base rate and adjusted no more often than quarterly; no higher than the lender charges on similar non-guaranteed loans

ecfr.gov

Minimum lender retention

7.5% of the total loan amount, held from the unguaranteed portion

ecfr.gov

• Borrower may be a cooperative, corporation, partnership or other legal entity organized for profit or nonprofit, an Indian Tribe, a public body, or an individual, and must be engaged in or proposing to engage in a business.ecfr.gov
• Individual borrowers must be U.S. citizens, lawful permanent residents (with a permanent green card), or citizens or residents of Palau, the Federated States of Micronesia, American Samoa, Guam, the Northern Mariana Islands or the Marshall Islands.ecfr.gov
• The borrower must show that loan funds will stay in the United States and that the project will primarily create or save jobs for rural U.S. residents; loans must be collateralized with fixed assets that remain in the United States.ecfr.gov
• The project must be located in a rural area: any area not in a city or town of more than 50,000 inhabitants and not in the urbanized area contiguous and adjacent to such a city or town. Exceptions allow certain local and regional food projects and cooperative value-added processing facilities in non-rural areas. Applications cannot be approved subject to later meeting the rural area requirement.ecfr.gov
• Eligible uses include land, buildings and infrastructure; business acquisitions, start-ups and expansions that create or save jobs; machinery and equipment; permanent working capital; pollution control; tourism and recreation facilities; leasehold improvements; mixed-use property with at least 50% of projected revenue from business use; and nursing homes and assisted living facilities.ecfr.gov
• Agricultural production is eligible only when it is not eligible for Farm Service Agency farm loans and is part of an integrated business that also processes agricultural products; that portion may not exceed 50% of the loan or $5 million, whichever is less. Commercial nurseries, forestry, mushrooms, hydroponics, animal boarding or training, commercial fishing, and algae and aquaculture are exempt from that limit.ecfr.gov
• Debt refinancing is eligible when the guaranteed loan extinguishes the debt. Refinancing debt owed to the applicant lender is limited to 50% of total use of funds, the debt must have been current for the past six months, and the new loan must give better rates or terms.ecfr.gov
• A project financed with tax-exempt obligations cannot be guaranteed, except a separate and distinct taxable portion that is not essential to the tax-exempt issue.ecfr.gov
• Ineligible borrowers include those with an outstanding federal court judgment, delinquent federal income taxes or federal debt, or a debarment or suspension (checked for the borrower and any owner with more than 20% or with control); businesses deriving more than 15% of annual gross revenue from gambling; businesses with income from prurient sexual activities or from illegal products or activities, including leasing to a marijuana dispensary; charitable or fraternal organizations; and lending, investment or insurance companies (with limited exceptions).ecfr.gov
• Ineligible B&I projects include timeshares, residential trailer parks, apartments, duplexes and other independent residential housing, and projects over $1 million that would transfer jobs between areas or add more than 50 jobs where demand is insufficient.ecfr.gov
• Loan funds cannot pay loan finder or broker fees, other federal debt, or distributions to anyone who will keep an ownership interest in the borrower, and cannot be used for lease payments.ecfr.gov

• Regulated lenders subject to federal or state supervision and credit examination are eligible without documentation, including federal and state chartered banks, Farm Credit System institutions with direct lending authority, savings and loans, savings banks, mortgage companies in a bank holding company, credit unions, and State bond banks or pools.ecfr.gov
• Every lender must be domiciled in a State, not be debarred or suspended, be current on federal debt, disclose any consent order, keep written conflict-of-interest standards and internal audit controls, and be registered in the System for Award Management (SAM).ecfr.gov
• Non-regulated lenders may be approved for up to five years. They must originate at least five commercial loans totaling at least $1 million in each of the last three years, keep five-year average commercial delinquency at or below 6% and losses at or below 3%, hold balance sheet equity of at least 10% of assets, keep a line of credit from a regulated lender, and keep a loan loss reserve of 1% of the unguaranteed portion of their guaranteed loans plus anticipated losses. Requests go to OneRDlenderapproval@usda.gov.ecfr.gov
• The lender must execute a lender's agreement before a loan note guarantee is issued. There is one agreement per lending entity (by tax ID), and approval under one OneRD program is approval for all of them.ecfr.gov
• The lender pays the one-time guarantee fee before the loan note guarantee is issued and the annual retention fee for as long as the guarantee is outstanding. Retention fees unpaid 60 days after the due date are delinquent and can lead to cancellation of the guarantee after 30 days' written notice.ecfr.gov
• The lender must keep at least 7.5% of the total loan from the unguaranteed portion, keep title to the note, its security interest and servicing, and may sell the guaranteed portion only after the loan is closed and fully disbursed and is not in default.ecfr.gov
• Neither the lender nor its officers may hold an ownership interest in, or be an officer or director with management control of, the borrower, and the borrower's owners may not hold more than 5% of the lender.ecfr.gov
• The lender must submit borrower and guarantor financial statements to the Agency within 120 days of the borrower's fiscal year end, with its own financial analysis. Annual statements meeting Agency accounting standards are required when the guaranteed loan balance is over $600,000.ecfr.gov

• The lender must prepare a written credit evaluation covering character, capacity, capital, collateral and conditions, with spreadsheets and ratio analysis compared with industry standards, global analysis of affiliates and guarantors, and support for projections that depart from history.ecfr.gov
• Existing businesses need at least 10% balance sheet equity (or debt to equity of no more than 9 to 1) at closing, or a borrower investment of at least 10% of eligible project costs, or owner-contributed capital of at least 10% of net fixed assets plus depreciation. Appraisal surplus and bargain purchase gains do not count as equity.ecfr.gov
• New businesses need 10% equity if they have sales contracts covering debt service for the loan term, 25% if the lender wants the guarantee before construction is complete, and otherwise 20% balance sheet equity (or 25% of project costs). The Agency may raise the requirement for higher-risk loans or lower it for strong existing businesses with guarantees.ecfr.gov
• All collateral must secure the whole loan; the lender may not take separate collateral for the unguaranteed portion. Collateral is discounted using sound loan-to-discounted-value practice, and intangible assets cannot be primary collateral.ecfr.gov
• Appraisals are required for real estate and for existing chattel worth more than $250,000. Real estate appraisals must follow USPAP and FIRREA and generally be done by a State Certified General Appraiser; appraisals may be no more than one year old, and the lender must submit an appraisal review report before closing.ecfr.gov
• Unsecured personal, partnership or corporate guarantees are required from anyone owning 20% or more of the borrower, at least equal to their ownership share times the loan amount, unless the Agency grants an exception.ecfr.gov
• An independent feasibility study is required for guaranteed loans over $1 million to a new business, and may be required for other loans.ecfr.gov
• Applications need current borrower and guarantor financial statements dated within 90 days, up to three years of historical statements, and projections through at least two years of full operation including a pro forma closing balance sheet. Credit reports must be submitted for loans of $200,000 or more, and a draft loan agreement for loans of $600,000 or more.ecfr.gov
• Repayment must fully amortize the loan with no balloon. Payments are due at least annually, and the first full principal and interest payment must start within three years of the note date.ecfr.gov

• Form RD 5001-1Application for Loan Guarantee, submitted by the lenderOpen
• Form RD 5001-2Lender's Agreement, executed once per lending entityOpen
• Form RD 5001-3Conditional Commitment issued by the Agency on approvalOpen
• Form RD 5001-5Unconditional Guarantee signed by each required guarantorOpen
• Form RD 5001-6Assignment Guarantee Agreement, used to sell the guaranteed portion to a holderOpen
• Form RD 5001-9Guaranteed Loan Closing ReportOpen
• Form RD 5001-12Certification of Non-Relocation and Market and Capacity Information ReportOpen
• Form RD 5001-4Loan Note Guarantee issued by the Agency after closingOpen

• Rule7 CFR part 5001, OneRD Guaranteed LoansVersion Current eCFR text, last amended by 90 FR 57351 (December 11, 2025)ecfr.gov
• Policy noticeOneRD Annual Notice of Guarantee Fee Rates, Periodic Retention Fee Rates, Loan Guarantee Percentage and Fee for Issuance of the Loan Note Guarantee Prior to Construction Completion for Fiscal Year 2026 (91 FR 11272)Version FY2026Effective Oct 1, 2025federalregister.gov
• RuleOneRD Guarantee Loan final rule (89 FR 79698)Effective Nov 29, 2024federalregister.gov
• Statute7 U.S.C. 1932, Assistance for rural entities (Consolidated Farm and Rural Development Act)govinfo.gov
• Program pageBusiness and Industry Guaranteed Loan program pagerd.usda.gov

• Oct 27, 2026Information notice

  SPUR Guaranteed Loan Program opens for FY2027 under the OneRD rule

  The Rural Business-Cooperative Service began accepting applications on October 27, 2026 for the Strengthening Processing for US Ranchers (SPUR) Guaranteed Loan Program, with at least $5 billion in loan level beginning in FY2027. SPUR is designed like B&I and administered under 7 CFR part 5001, but it is limited to meat, poultry and seafood processing, has no geographic restriction, carries a 90% guarantee, a 3% guarantee fee, a 0.55% retention fee and a 0.5% fee for a guarantee before construction completion, and requires the lender to hold at least 10% of the loan.

  What to do: For meat, poultry or seafood processing deals, including urban ones, compare SPUR with B&I and talk to the Rural Development State Office before applying. Plan for the 10% minimum retention instead of B&I's 7.5%.

  Read the source
• Mar 9, 2026Policy notice

  FY2026 OneRD fee and guarantee percentage notice raises the B&I guarantee to 85% for loans under $5 million

  The FY2026 annual notice sets B&I guarantees at 85% for loans under $5 million and 80% for loans of $5 million to $25 million. The FY2025 notice (89 FR 53041) had set 80% for all standard B&I loans. Fees are unchanged: a 3.0% guarantee fee and 0.55% annual retention fee, or 1.0% and 0.50% for reduced-fee projects, plus 0.50% when the guarantee is issued before construction is complete. The rates apply to loans obligated in FY2026.

  What to do: Structure loans under $5 million obligated in FY2026 with the 85% guarantee and confirm the percentage and fee rates on the conditional commitment. Watch the Federal Register for the FY2027 annual notice before quoting terms on loans that will be obligated after September 30, 2026.

  Effective Oct 1, 2025Read the source
• Dec 12, 2025Rule

  USDA confirms the 2024 OneRD final rule as published

  Rural Development confirmed the September 30, 2024 OneRD final rule (89 FR 79698) as published, effective November 29, 2024, and responded to the public comments it received.

  What to do: Treat the 2024 rule text, as later corrected, as final. No separate action is needed.

  Effective Nov 29, 2024Read the source
• Dec 11, 2025Rule

  OneRD rule corrections: affiliate definition and agricultural production limits

  A correcting rule redefined an affiliate as a person or entity closely attached or connected to another and adopted the SBA affiliation principles at 13 CFR 121.301(f) for eligibility. It restored the definition of commercially available and restated the B&I agricultural production rule: the production portion of a loan may not exceed 50% of the loan or $5 million, whichever is less, with exemptions for nurseries, forestry, mushrooms, hydroponics, animal boarding or training, commercial fishing, and algae and aquaculture.

  What to do: Use the 13 CFR 121.301(f) affiliation principles when identifying affiliates for eligibility and global analysis, and check the agricultural production share of any loan against the 50% or $5 million limit.

  Effective Dec 11, 2025Read the source
• Dec 9, 2024Rule

  Technical corrections to the 2024 OneRD final rule

  Rural Development corrected the September 30, 2024 final rule: an incomplete affiliate definition, an instruction that did not belong in the final rule, a misspelled heading, and a misstatement about protective advances.

  What to do: Use the corrected eCFR text for the affiliate definition and protective advances (7 CFR 5001.516).

  Effective Dec 9, 2024Read the source
• Sep 30, 2024Rule

  OneRD Guarantee Loan final rule revises 7 CFR part 5001

  A final rule with comment revised the OneRD regulation for B&I and the other three programs. For B&I it clarified the capital and equity rules, including the closing balance sheet and the owner-contributed capital calculation; said applications cannot be approved subject to later meeting rural area requirements; clarified eligibility of leasehold improvements and independent living facilities; and said tax returns are not acceptable financial statements for underwriting. It also revised refinancing, lender eligibility, origination and servicing provisions.

  What to do: Update B&I underwriting templates to the current 7 CFR part 5001 text. Confirm rural eligibility before applying, use prepared financial statements rather than tax returns, and document capital and equity with a closing balance sheet.

  Effective Nov 29, 2024Read the source

Only lenders apply. A regulated lender (bank, credit union, savings institution or Farm Credit lender under federal or state supervision) registers in SAM, enrolls in the Agency's electronic system, and signs the OneRD lender's agreement (Form RD 5001-2), which can be submitted with its first application. A non-regulated lender must first be approved by sending a written request with the required financial and portfolio information to OneRDlenderapproval@usda.gov. The lender then works with the Rural Development State Office business programs staff where the project is located. It can ask for an optional preliminary eligibility review and then submits a complete application (Form RD 5001-1 with its credit evaluation and supporting documents) at any time of year. If approved, the Agency issues a conditional commitment. After closing, the lender pays the guarantee fee and submits its closing certifications, and the Agency issues the loan note guarantee.

• B&I Guaranteed Loan program page (select a state for local contacts)
• OneRD Guarantee Loan Initiative (forms, lender guide, notices)
• Rural Development State Offices