THE USDA IRP LOAN PROGRAM
The United States Department of Agriculture Intermediary Relending Program (USDA IRP) was created to alleviate poverty and increase economic activity and employment in rural communities, especially disadvantaged and remote communities, through financing targeted primarily towards smaller and emerging businesses, in partnership with other public and private resources, and in accordance with the State and regional strategy based on identified community needs.
Target Market:
All businesses located in a designated rural area. A rural area is defined as all territory of a State that is not within the outer boundary of any city having a population of 25,000 or more.
Eligible Borrower:
An eligible borrower is a private, for-profit firm conducting business within Butler County, Pennsylvania. A business is defined as any proprietorship, partnership, or corporation engaged in manufacturing, wholesaling, distribution, retailing or servicing a product for a profit. All eligible borrowers must be unable to finance the proposed project from its own resources or through commercial credit or other Federal, State, or local programs at reasonable rates and terms.
Use of Funds:
Business acquisition when the loan will prevent the business from closing.
Business conversion, repair, renovation, modernization, or development.
Land acquisition, preparation and associated fees.
Purchase of machinery and equipment, including installation costs.
Purchase of pollution control and abatement, inclusive of leasehold improvements.
Start – up operating costs and working capital.
Interest during the period before the facility becomes income producing.
Hotels, motels, tourist homes, bed and breakfast establishments, convention centers, and other tourist and recreational facilities unless prohibited by loan policy.
Loan Amounts:
A maximum of $150,000 or 40% of the total eligible project cost, whichever is less. A minimum loan amount of $50,000 not to exceed 40% of the total eligible project cost. The borrowers must provide at least 10% of the total project cost as equity injection.
Terms and Conditions:
Maximum loan terms based on the following:
- Loans secured by real estate will not exceed 10 years.
- Loans secured by machinery / equipment will not exceed 5 years.
- Loans secured by inventory / accounts receivable or extended for working capital purposes will not exceed 2 years.
Loan Rates:
Minimum interest rates for the loans extended will be fixed for the term of the loan:
- Real estate secured loans considered at prime minus 1%.
- Machinery / Equipment secured loans considered at prime rate.
- Inventory / accounts receivable secured loans considered at prime plus 1%.
- Loans extended for working capital purposes considered at prime plus 1%.
Job Creation:
All eligible borrowers must agree to create or retain one full-time equivalent job per every $50,000 borrowed within a 36-month period of time.
Loan Fees:
| Loan Application Fee (Non Refundable) | 1% of the loan |
| Loan Commitment Fee | 1% of the loan amount |
| Annual Servicing Fee | ½% of the outstanding loan amount |
General Conditions:
Other fees associated with the loan including, but not limited to: appraisal, recording, legal counsel, credit reference, property report, UCC-1 searches, flood zone report, phase I environmental audit fees are the responsibility of the borrower. The Community Development Corporation is an equal opportunity provider, employer, and lender. To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W. Washington, D.C. 20250-9410, or call (800).795.3272 (voice) or TTY/TDD only: 800.654.5984.
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