RURAL
BUSINESS-COOPERATIVE SERVICE, DEPARTMENT OF AGRICULTURE
AUTHORIZATION:
Health
and Human Services Act of 1986, Section 407, Public Law 99-425,
7 U.S.C. 1932 note; Food Security Act of 1985, Section 1323, as
amended, Public Law 99-198, 7 U.S.C. 1631; Community Economic Development
Act of 1981, Section 623, as amended, Public Law 97-35, 42 U.S.C.
9812.
To
finance business facilities and community development.
TYPES
OF ASSISTANCE:
Direct Loans. Place Cursor Here for Definition
USES
AND USE RESTRICTIONS:
An
entity that receives an Intermediary Relending Program (IRP) loan
from the Rural Business-Cooperative Service (RBS) is referred to
as an intermediary. Intermediaries must relend all of the loan funds
received from the IRP loan for business facilities or community
development in rural areas. An entity that receives a loan from
an intermediary is referred to as an ultimate recipient. The maximum
loan to any one intermediary is $2 million. The maximum term is
30 years and the interest rate is one percent per annum. Intermediaries
may not use IRP funds to finance more than 75 percent of the cost
of an ultimate recipient's project or for a loan of more than $250,000
to one ultimate recipient. (No more than 25 percent of an IRP loan
approved may be used for loans to ultimate recipients that exceed
$150,000.)
ELIGIBILITY
REQUIREMENTS:
Applicant
Eligibility: Eligible intermediaries may include:
Private nonprofit organizations, State or local governments, and
Federally recognized Indian tribes and cooperatives.
Beneficiary
Eligibility: Ultimate recipients may include:
For profit organizations, individuals, public and private nonprofit
organizations.
Credentials/Documentation:
Intermediaries must have adequate legal authority and a proven
record of successfully assisting rural businesses and industries.
Ultimate recipients must not be located within a city with a population
of 25,000 or more. Both intermediaries and ultimate recipients
must be unable to obtain the loan at reasonable rates and terms
through commercial credit or other Federal, State, or local programs.
This program is excluded from coverage under OMB Circular No.
A-87.
Pre-application
Coordination: This program is excluded from
coverage under OMB Circular No. A-102. This program is eligible
for coverage under E.O. 12372, "Intergovernmental Review of Federal
Programs." An applicant should consult the office or official designated
as the single point of contact in his or her State for more information
on the process the State requires to be followed in applying for
assistance, if the State has selected the program for review. An
environmental impact assessment is required for this program.
Application
Procedure: Potential intermediaries should
file applications with the State office for the State in which
the intermediary's headquarters is located. The application package
includes Form 4274-1 and a written work plan. More details are
available in 7 CFR 4274.343, or from the appropriate Rural Development
State Office. The Rural Development administers the program on
the local level. Intermediaries develop their own application
procedures for ultimate recipients.
Award
Procedure: The application of each intermediary
will be evaluated by the RD State Office. Applications received
by RBS will be reviewed and ranked quarterly and funded in the
order of priority ranking.
Deadlines:
None.
Range
of Approval/Disapproval Time: From 30 to 60
days.
Appeals:
Adverse actions by RBS in connection with this program may be
appealed by contacting the Area Supervisor of the USDA National
Appeals Division. Appeals will be handled in accordance with 7
CFR 1900-B.
Renewals:
Not applicable.
ASSISTANCE
CONSIDERATIONS:
Formula
and Matching Requirements: This program has
no statutory formula or specific matching requirements, but RBS
funds loaned to one ultimate recipient by an intermediary must not
exceed 75 percent of the cost of the ultimate recipient's project.
Length
and Time Phasing of Assistance: Applicant
intermediaries must show a need for the funds and limit the request
to an amount they can expect to use within one year. After a loan
is approved, the funds are released to the intermediary in multiple
advances as required to fund loans to ultimate recipients.
POST
ASSISTANCE REQUIREMENTS:
Reports:
Intermediaries must submit quarterly reports on lending activity,
income and expenses, financial condition and progress, and an annual
budget.
Audits:
In accordance with the provisions of OMB Circular No. A- 133 (Revised,
June 24, 1997), "Audits of States, Local Governments, and Non-Profit
Organizations," non federal entities that expend financial assistance
of $300,000 or more in Federal awards will have a single or a
program-specific audit conducted for that year. Nonfederal entities
that expend less than $300,000 a year in Federal awards are exempt
from Federal audit requirements for that year, except as noted
in Circular No. A-133.
Records:
Records and accounts must be maintained to reflect the operations
of each project.
In fiscal year 2001, 109 applications were received and 68 were
approved. It is anticipated that in fiscal year 2002, 110 applications
will be received (including 32 carried over from fiscal year 2001)
and 73 loans will be approved.
REGULATIONS,
GUIDELINES, AND LITERATURE:
7 CFR 4274, Subpart D; 7 CFR 1951, Subpart R.
INFORMATION
CONTACTS:
Regional
or Local Office: RBS State Office listed in
Appendix IV of the Catalog.
Headquarters
Office: Rural Business-Cooperative Service,
Room 6867, Stop 3225, South Agriculture Building, Washington,
DC 20250-3225. Telephone: (202) 690-4100. FTS is not available.
Web
Site Address: http://www.rurdev.usda.gov
EXAMPLES
OF FUNDED PROJECTS:
(1) $750,000 loan to a nonprofit corporation to relend to businesses
within a State; (2) $1,000,000 loan to a nonprofit corporation to
relend to businesses within 12 counties in two States; (3) $500,000
loan to a nonprofit corporation serving an eight county area for
relending to businesses; and (4) $850,000 loan to a nonprofit corporation
to relend to new and expanding businesses throughout the State.
CRITERIA
FOR SELECTING PROPOSALS:
Factors considered in judging applications include: Financial condition,
assurance of repayment ability, equity, collateral, experience and
record of managing a loan program or providing other assistance
to rural businesses, ability to leverage with funds from other sources,
extent assistance would flow to low income persons.
