Rural Development is committed to helping improve the economy and quality of life in
rural America.
Rural Utilities Service
Helps rural utilities expand and keep their infrastructure and technology up to date, and establish new and vital services such as distance learning and telemedicine.
Rural Business—Cooperative Service
Provides leadership in building competitive businesses including sustainable cooperatives that can prosper in the global marketplace.
Rural Housing Service
Helps rural communities and individuals by providing loans and grants for housing and community facilities.
We can build an entire community from the ground up.
To assist rural communities in creating prosperity so they are self-sustaining and economically thriving through investments that create ladders of opportunity, build regional resilience, and
support the growth of emerging markets.
Rural Development’s Mission
USDA Rural Development
Rural Business-Cooperative Service Programs
• Rural Energy for America Program• Value Added Producer Grants• Business and Industry Guaranteed Loans• Cooperative Development Assistance• Biorefinery Assistance Program• Intermediary Relending Program• Rural Business and Development Grants• Rural Business Investment Program• Rural Microentrepreneur Assistance Program
USDA Rural Development
Rural Energy for America Program
Renewable Energy & Energy Efficiency
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Promotes energy efficiency and development of
renewable energy for agricultural producers and rural
small businesses through:
• Grants for energy audits and renewable energy
development assistance
• Guaranteed loans and grants for energy efficiency
improvements and renewable energy systems
Who may apply?
What is an eligible area?• Agricultural producers may be in rural or non-rural areas.
• Businesses must be in an area other than a city or town with a population of greater than 50,000 inhabitants and the urbanized area of that city or town. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Agricultural Producer Rural Small Business
• Individual or entity that receives 51 percent or more of their gross income from agricultural production –
crops, livestock, aquaculture, forestry operations, nurseries, dairies
• For-profit small business –
as defined by the Small Business Administration (SBA) using the NAICScodes :
http://www.sba.gov/size
• Rural area or non-metro community of < 50,000
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Energy Efficiency Renewable Energy
Lighting Solar
Heating Wind
Cooling Small Hydroelectric
Ventilation Anaerobic Digesters
Fans Biomass
Automated Controls Geothermal
Insulation Wave/Ocean Power
Eligible Projects
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Eligible Project Costs Post-
application Ineligible Project Costs
• Equipment: • Purchase & installation• New or refurbished
• Construction & facility improvements
• Retrofitting
• Professional service fees
• Permits & license fees
• Working capital, land acquisition (Guaranteed loan ONLY with restrictions)
• Residential energy projects• Equipment:
• Farm tillage equipment• Used equipment• Vehicles
• Pre-application expenses
• Application preparation or grant writer fees
• Line of credit
• Lease payments
• Payment to the applicant/business owner, beneficiary, or relative
Rural Energy for America Program –Renewable Energy & Energy Efficiency
What funding is available?Grants for up to 25% of total eligible project costs.
• Loan guarantees for up to 75 % of total eligible project costs on Loan ONLY projects• Combined grant and loan guarantee funding up to 75% of total eligible project costs.
(25% grant and 50% loan guarantee)
Renewable Energy Systems
Energy Efficiency Improvements
Minimum Grant Request
$2,500Total eligible project costs > $10,000
Minimum Grant Request
$1,500Total eligible project costs > $6,000
Maximum Grant Request
$500,000Total eligible project costs > $2 million
Maximum Grant Request
$250,000Total eligible project costs > $1 million
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Minimum Loan Amount
$5,000Total eligible project costs > $6,667
Maximum Loan Amount
$25 millionTotal eligible project costs > $33.4 million
Details • USDA guarantees a commercial loan; applicant must have a willing lender.
• Terms are negotiated between the lender and borrower.
• Fees, appraisals, equity & collateral requirements apply as determined
by the lender and approved by USDA RD.
REAP Guaranteed Loan Assistance
Up to 75%of Eligible Project Costs
Rural Energy for America Program –Renewable Energy & Energy Efficiency
REAP Guaranteed Loan Terms
GUARANTEE • 85% for loans $600,000 or less.• 80% for loans over $600,000 up to $5 Million• 70% for loans over $5 Million up to $10 Million• 60% for loans over $10 Million
MAXIMUM TERM LIMITS
• Working Capital – 7 Years• Machinery & Equipment – 15 Years
(or useful life, whichever is less)• Real Estate – 30 Years
OTHER FUNDS REQUIRED
• 25% of project costs
INTEREST RATE
• Fixed or Variable; if variable can be adjusted quarterly• Negotiated between lender and borrower
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Are there additional requirements?
• Applicants must provide at least 75% of the project cost if applying for a grant only.
• Applicants must provide at least 25% of the project cost if applying for loan, or loan and grant combination.
• Projects greater than $200,000 require a technical report.
• Energy efficiency projects require an energy audit or assessment.
– More information is available regarding subsidized energy audits.
Rural Energy for America Program –Renewable Energy & Energy Efficiency
APPLICATION WINDOW CLOSING DEADLINE:
Grants
October 31 Set Aside Fund Competition-Grant Request $20,000 or less
Grants
March 31
Grant Request $20,000 or less not competing for set aside
Grant Request > $20,000
Combination Guaranteed Loan/ Grant Request
Guaranteed
Loans
Continuous Application Cycle
Monthly Competitions for funds throughout the year
Loan must score a minimum of 50 to compete monthly
Rural Energy for America Solar project on
Island Hammock Pet Hospital
Key Largo, FL
Recent Florida/USVI Examples:
Rural Energy for America,
10 KW Solar System
For irrigation system, large
water pump and refrigeration.
Palm City, FL
Recent Florida/USVI Examples:
Rural Energy for America Program –Renewable Energy & Energy Efficiency
Questions?
Value-Added Producer Grant
PurposeProvides funds for economic planning activities or eligible
working capital expenses:
• To help agricultural producers enter into value-added activities related to the processing and marketing of agricultural products
• To expand markets for, and increase financial returns to agricultural producers
• To strengthen the rural economy
Value-Added Producer Grant
National Competition
Maximum Award Amounts $75,000 Planning
$250,000 Working Capital
Matching Requirement1-to-1 match (50 percent of total project costs) cash or eligible in-kind
contributions to be used only for eligible project purposes.
Grant PeriodUp to 36 months, depending on project complexity.
Value-Added Producer Grant
Basic Program Requirements
• Applicant eligibility• Project eligibility• Purpose eligibility• Other eligibility requirements• Evaluation criteria
Value-Added Producer Grant
Applicant Eligibility
Agricultural ProducerAn individual or entity directly engaged in the production of
an agricultural commodity, or that has the legal right to harvest an agricultural commodity, that is the subject of the
value-added project.
Agricultural producers must “directly engage” through substantially participating in the labor, management, and field
operations.
Value-Added Producer Grant
Four Eligible Applicant Types
• Independent Producers
• Agricultural Producer Groups
• Farmer or Rancher Cooperatives
• Majority-Controlled Producer-Based Businesses
Value-Added Producer Grant
All Four Applicant Types Must :
• Currently produce and own more than 50 percent of the raw commodity that will be used for the Value-Added product.
• Own the product from its raw commodity state through the production of the Value-Added product during the Project (except for MTVC).
Value-Added Producer Grant
Emerging MarketA new or developing, geographic or demographic market that is new to
the Applicant or the Applicant's product.
• Applicants cannot have supplied the proposed product, geographic or demographic market for more than two years at time of application submission.
• Agricultural Producer Groups, Farmer or Rancher Cooperatives, and Majority-Controlled Producer-Based Businesses, must show that they are entering an emerging market as a result of the proposed project.
Value-Added Producer Grant
Five Value-Added Methodologies
• Change in physical state
• Produced in a manner that enhances the value of the agricultural commodity
• Physical segregation
• Farm- or ranch-based renewable energy
• Locally-produced agricultural food product
Value-Added Producer Grant
Change in Physical State
An irreversible processing activity that alters the raw agricultural commodity and enhances its value and is something other than a post-harvest process that primarily acts to preserve the commodity for later sale.
Examples include, but are not limited to-
• milk into cheese • wheat into flour • wool into clothing or rugs • corn into E-85 ethanol • livestock into packaged meat
Value-Added Producer Grant
Produced in a manner that enhances the value of the agricultural commodity
• The value-added product results from the use of a recognizably coherent set of agricultural production practices in the growing of the raw agricultural commodity, such that a differentiated market identity is created for the resulting product.
• Nonstandard production method that adds value per unit of production over a standard production method, and demonstrates this by a quantifiable comparison with products produced in the standard manner.
Examples include, but are not limited to-• organic carrots, • eggs produced from free-range chickens.
Value-Added Producer Grant
Physical Segregation
Value-added product results from physically separating (i.e. distance or structure) the agricultural commodity from other varieties of the same commodity on the same farm during production and harvesting, with continued separation during the processing and
marketing of the value-added product.
Example: GMO corn separated from non-GMO corn on the farm during production and harvesting, with continued separation through marketing.
Value-Added Producer Grant
Farm- or Ranch-Based Renewable Energy
An agricultural commodity that is used to generate renewable energy on a farm or ranch owned or leased by the independent producer applicant that produces the agricultural commodity.
Examples include, but are not limited to-• dairy manure into methane and
electricity generated on the farm• corn into biodiesel generated on the
farm.
Generation of energy from wind, solar, geothermal or hydro sources are not eligible.
Value-Added Producer Grant
Locally-Produced Agricultural Food Product
Any agricultural food product that is marketed and distributed within 400 miles of the product’s origin or within the State in which the product is produced.
Examples include, but are not limited to-• specific local grapes with characteristics attributable to the growing area sold to a
winery that will produce a local wine;• local sweet corn advertised and sold at a premium as a fresher locally-produced
alternative to non-local produce.
Value-Added Producer Grant
Value Added Producer Grant Program
Questions?
Business & Industry
Loan Guarantee
Business & Industry
Loan Guarantee
What does this program do?
Business and Industry loan Guarantees are to help lenders extend credit needed to promote
economic development and job creation in rural areas.
Business & Industry
Loan Guarantee
Eligible Borrowers
• For-profit business
• Nonprofits and cooperatives
• Federally recognized Tribes
• Public bodies
Eligible Lenders
• Federal or State chartered banks
• Savings and loans
• Farm credit banks
• Credit unions
Business & Industry
Loan Guarantee
Eligible uses include but are not limited to: Ineligible uses of funds include:
• Business conversion, enlargement, repair, modernization, or development
• Purchase and development of land, easements, rights-of-way, buildings, or facilities
• Purchase of equipment, leasehold improvements, machinery, supplies, or inventory
• Debt refinancing when new jobs will be created and other conditions are met
• Business and industrial acquisitions when the loan will keep the business from closing and/or save or create jobs
• Lines of credit• Owner-occupied and rental housing• Golf courses• Racetracks or gambling facilities• Churches or church-controlled organizations• Fraternal organizations• Lending, investment and insurance companies• Projects involving more than $1 million and therelocation of 50 or more jobs• Production agriculture, with certain exceptions
Business & Industry
Loan Guarantee
Maximum amount of a
loan guarantee
• 80% for loans of $5 million or less • 70% for loans between $5 and $10 million • 60% for loans exceeding $10 million , up to $25 million maximum
Loan Terms• Maximum term on real estate is 30 years • Maximum term on machinery and equipment is useful life or 15 years,
whichever is less • Maximum term on working capital not to exceed 7 years • Balloon payments are not permitted • Reduced payments may be scheduled in the first 3 years
Business & Industry
Loan Guarantee
What are the underwriting and security requirements?
• The proposed operation must have realistic repayment ability
• New enterprises may be asked to obtain a feasibility study by a recognized independent consultant
• The business and its owners must have a good credit history
• At loan closing/project completion, the business must have tangible balance sheet equity position of:– 10 percent or more for existing businesses, or– 20 percent or more for new businesses.
B&I Guaranteed Loan Bay Water Exclusive Inc. Boat Club Bonita Springs, FL
Business & Industry
Loan Guarantee
Questions?
Rural DevelopmentFlorida Area 6 (South Florida)
Contact Information:
Michael T Botelho, Area DirectorRoyal Palm Beach Area Office
561-792-2727 X 5
Yashira Mendez, Area Specialist Royal Palm Beach Area Office
561-792-2727 X 5Email: [email protected]