Rural Development is committed to helping improve …...2017/06/08 · Rural Utilities Service Helps rural utilities expand and keep their infrastructure and technology up to date,

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


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

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

http://www.sba.gov/size


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


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


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


Maximum Grant Request

$500,000Total eligible project costs > $2 million

Maximum Grant Request

$250,000Total eligible project costs > $1 million


Minimum Loan Amount


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


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


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.


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:


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


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.


Basic Program Requirements

• Applicant eligibility• Project eligibility• Purpose eligibility• Other eligibility requirements• Evaluation criteria


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.


Four Eligible Applicant Types

• Independent Producers

• Agricultural Producer Groups

• Farmer or Rancher Cooperatives

• Majority-Controlled Producer-Based Businesses


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).


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.


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


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


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.


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.


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.


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 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]

mailto:[email protected]

Documents

Rural Development is committed to helping improve …...2017/06/08 · Rural Utilities Service Helps rural utilities expand and keep their infrastructure and technology up to date,