USDA Rural Business-Cooperative Service Administrator Sam Rikkers today unveiled new rules to expand access to capital for rural businesses. "Access to capital is one of the most important needs for businesses," Rikkers said. "USDA is partnering with the Treasury Department and other agencies to ensure that rural businesses have the resources they need to prosper and grow. The regulatory changes I am announcing today will help businesses expand their operations and create jobs." The changes make it easier for rural businesses to qualify for loans in USDA's Business and Industry Guaranteed Loan Program. They allow businesses to use the Mew Markets Tax Credit as a form of equity, and allow, for the first time, employees of a business to qualify for loan guarantees to purchase stock in a business by forming an Employee Stock Ownership Plan or worker cooperative. Other improvements include: New, loan application scoring criteria, including priority for loans to businesses that will create quality jobs, such as those with health care benefits; Reduced paperwork requirements to refinance loans; Strengthened eligibility criteria for non-regulated lenders (such as privately owned finance companies) to participate in the B&I program; Expanded loan eligibility, including in urban areas, for projects that process, distribute, aggregate, store and/or market locally or regionally produced foods.
The stock ownership provisions are modeled after rural cooperative businesses. Co-ops have been economic development partners with USDA for decades.