USDA Business & Industry Loans

USDA Business & Industry Loans for Rural Businesses

$10K–$5MLoan amounts

12 mo TIBMin. time in business

600+ creditMin. credit score

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By Diana Chen — SBA program specialist Published May 3, 2026 Updated June 18, 2026 Editorial policy

What is a USDA business loan?

USDA business loans are government-guaranteed loans for businesses in rural communities (populations under 50,000), administered through USDA Rural Development and made by participating commercial lenders. Programs include USDA Business & Industry (B&I) loans up to $25M, REAP loans for renewable energy in rural areas, and Intermediary Relending Program loans. Loans cover real estate, equipment, working capital, and refinancing. Rates of 6-12% APR, terms up to 30 years.

What Are USDA Business & Industry Loans?

The USDA Business & Industry (B&I) Guaranteed Loan Program provides loan guarantees to businesses in rural areas (populations under 50,000). Like SBA loans, the USDA guarantees 60–80% of the loan, enabling lenders to extend credit they otherwise wouldn’t. Maximum guarantee: $25M (up to $40M for certain projects).

Who Qualifies for USDA B&I Loans

The business or project must be located in a rural area (city or town under 50,000 population). Eligible borrowers include: for-profit businesses, nonprofits, cooperatives, federally recognized tribes, and public bodies. The primary purpose must be to create or save jobs in rural communities.

USDA vs. SBA Loan Comparison

Factor	USDA B&I	SBA 7(a)
Location Requirement	Rural areas only (<50K population)	Anywhere in the U.S.
Max Guarantee	$25M–$40M	$3.75M
Max Term (Real Estate)	30 years	25 years
Max Term (Equipment)	15 years	10 years
Approval Time	60–120 days	60–90 days

USDA B&I Eligible Uses

Business conversion, enlargement, repair, modernization, or development
Purchase and development of land, easements, rights-of-way, buildings, or equipment
Start-up costs and working capital
Debt refinancing when it improves cash flow and creates or saves jobs

Source: USDA Rural Development Business & Industry Loan Guarantee Program. Data as of 2026.

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Frequently Asked Questions

Who qualifies for USDA business loans?

USDA loans require: business located in a rural area (population under 50,000 or designated rural by USDA), legal U.S. business entity, ability to repay, and project meeting USDA priorities (job creation, rural economic development). Most types of businesses qualify except gambling, lending, and certain other restricted uses.

How is USDA different from SBA?

USDA: focuses on rural communities (under 50,000 population), larger loan sizes (up to $25M vs SBA $5M), longer terms (up to 30 years), often lower rates due to USDA guarantee. SBA: any location, smaller loans, more flexible underwriting. Rural businesses should compare both — USDA may offer better terms for larger projects.

What can USDA business loans be used for?

USDA B&I loans: business acquisition, expansion, real estate purchase, equipment, working capital, refinancing existing debt, and renewable energy installations. REAP loans: renewable energy and energy efficiency improvements. Specific use restrictions apply — some industries excluded (lending, gambling, certain hospitality).

How long do USDA business loans take to close?

USDA loans typically take 90-180 days to close, longer than SBA loans due to additional environmental and project review. Plan ahead for USDA timelines — the process is slow but the terms are often worth it for large rural projects.

What's the USDA REAP program?

REAP (Rural Energy for America Program) provides grants and guaranteed loans for renewable energy systems and energy efficiency improvements at rural small businesses and agricultural producers. Covers solar, wind, biomass, geothermal, and hydroelectric installations. Grants up to 25% of project cost; combined loans + grants up to 75%.

Where do I find a USDA-approved lender?

USDA Rural Development maintains a list of approved B&I lenders. Most large banks (Wells Fargo, US Bank, Bank of America rural divisions) and many community banks in rural areas are USDA-approved. Start with your local community bank — they often have established USDA relationships.

Diana Chen MBA, Small Business Finance Specialist

MBA Finance (Duke Fuqua), 9 years bank credit analysis and loan underwriting

Diana Chen holds an MBA in Finance from Duke University Fuqua School of Business and spent 9 years as a credit analyst and commercial loan officer at two regional banks. She focuses on SBA lending programs, underwriting standards, and business creditworthiness. Contributor to the NSBA resource library.

All content is reviewed against SBA, Federal Reserve, and CFPB guidelines. Small Business Loans Today is an independent affiliate publisher — not a lender or broker.

Sources referenced on this page

Authoritative references consulted for lender-program details, rate ranges, and eligibility requirements discussed above. See our research sources policy for how we verify claims.