Rural America is critical to our nation’s economy and small businesses located in these communities can be catalysts for growth. Yet, getting access to the financial resources that these businesses need to start-up, grow and expand is often challenged and hindered by perceptions of risk such as vulnerability to natural disasters, an inability to provide collateral, and even a lack of sector-specific financing by banks themselves.
To alleviate these problems and boost access to capital, community banks, like First Bank SBA, have become an increasingly important partner to small businesses and family farms in rural areas. Through several government loan programs, First Bank SBA is committed to expanding loans to small businesses in rural communities. Let’s explore your options.
Government Loan Programs for Rural Small Businesses
If your business is located in a rural community, you can take advantage of a variety of SBA loan programs as well as low interest loans from other agencies, such as the U.S. Department of Agriculture (USDA) and the U.S. Farm Service Agency (FSA). To qualify as a rural business, you must be in a community or area with a population under 50,000 – this tool from the USDA can help you determine if you qualify by your address.
Available loan programs include:
- Business and Industry (B&I) Guaranteed Loan Program – Maintained by the USDA, this program provides a guarantee of up to 80% of a loan. Funds can be used for the following:
- Developing, converting, modernizing, enlarging, or repairing your business.
- Land purchase and development.
- Purchasing equipment, leasehold improvements, machinery, supplies, or inventory.
- Refinance existing debt, if 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.
- Farm Loan Programs – Offered by the USDA’s Farm Service Agency, these loans are a valuable resource to help farmers and ranch operators build and grow their businesses. Loans are available for financing small, niche, and beginner operations through to 100% financing for direct farm ownership loans to help farmers and ranchers become owners-operators of family farms, expand operations, save land for future generations, and increase agricultural productivity.
- SBA Community Advantage Loan Program – If your business is struggling to get access to affordable credit and operates in an underserved market, Community Advantage loans are a great choice for new and expanding businesses with borrowing needs of $250,000 or less. Available exclusively through community banks with a history of serving under-served communities, like First Bank, Community Advantage offers affordable interest rates and long maturities.
How do I Qualify for a Rural Business Loan?
In addition to meeting eligibility requirements such as the 50,000 rule and the specific government eligibility requirements of each loan (we can advise you on those specifics), you’ll also need to demonstrate good credit, cash flow, a solid business plan, a strong balance sheet, profit versus loss, and other factors can all help boost your loan chances. We can help you assemble this information and help you understand how to best position your business for a successful loan application.
Contact First Bank SBA to learn more about the SBA loan options available for small businesses in rural areas. We can help you match the right program to your needs, seamlessly navigate the application process and provide valuable financial guidance after the loan has closed.