Grants

Grant Opportunities -  Grant Success

U.S. Department of Agriculture

U.S. Department of Agriculture (USDA), provides financial assistance in the form of grants and loans to improve the economy and quality of life in rural America. Technical assistance and information resources are also available. These programs can assist entities seeking to develop and build an ethanol production facility. USDA provides two types of Programs: Business Programs & Cooperative Services. Summary descriptions of the programs follow.

Business Programs: USDA through its "Rural Business-Cooperative Service" program creates partnerships with commercial lending institutions, the Farm Credit System, Farmer Mac, and other supplemental sources of funding to provide financing for qualified rural business enterprises. Business Programs are available to businesses in areas outside the boundary of urban areas with populations under 50,000. Recipients may include any legally organized entity, including cooperatives, corporations, partnerships, trusts, profit and nonprofit organizations, Indian tribes, private companies, municipalities, counties or individuals. 

Business and Industry (B&I) Guaranteed Loan Program: Provides financial backing for rural businesses to help create jobs and stimulate rural economies. Provides guarantees up to 90% of a loan made by a commercial lender. Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate, and certain types of debt financing. The maximum loan amount to any one borrower is $25 million.

Cooperative Stock Purchase Program: Farmers can use B&I loan guarantees to help pay for stock in a start-up cooperative that processes an agricultural commodity into a value-added product. The cooperative must be a new venture. The cooperative (not the farmer) must make a written request to its USDA Rural Development State Office for determination of eligibility.

Rural Business Opportunity Grants: Designed to promote economic development in rural communities by making grants to pay the costs of providing economic planning, technical assistance, or training. Applicants must be a public body, nonprofit corporation, Indian tribe, or cooperative with members that are primarily rural residents. Applicants must have expertise in the activities proposed and be able to demonstrate that funding will result in rural economic development. A maximum of $1.5 million is available for the program, with most grants of $50,000 or less.

Rural Business Enterprise Grants: The Rural Business-Cooperative Service makes grants to facilitate development of small and emerging business enterprises in rural areas. Use of grant funds may include acquisition and development of land and the construction of buildings, plants, equipment, access roads, parking areas, and utility extensions; refinancing; fees; technical assistance and training; loans to third parties; production of television programs to provide information to rural residents; and distance learning networks.

Intermediary Relending Program: The purpose of the Intermediary Relending Program (IRP) is to finance business facilities and community development projects in rural areas. This is achieved through loans made by the Rural Business-Cooperative Service (RBS) to intermediaries. Intermediaries re-lend funds to ultimate recipients for business facilities or community development. Intermediaries establish revolving loan funds so collections from loans made to ultimate recipients in excess of necessary operating expenses and debt payments will be used for more loans to ultimate recipients.

Rural Economic Development Loans: Provides zero-interest loans to electric and telephone utilities financed by the Rural Utilities Service (RUS), an agency of the United States Department of Agriculture, to promote sustainable rural economic development and job creation projects.

RUS Electric Program: Makes insured loans and guarantees of loans to nonprofit and cooperative associations, public bodies, and other utilities. Insured loans primarily finance the construction of facilities for the distribution of electric power in rural areas. The guaranteed loan program has been expanded and is now available to finance generation, transmission, and distribution facilities in rural areas.

Biobased Products and Bioenergy Program: This program seeks to promote national economic interests through the conversion of renewable farm and forestry resources to affordable fuel (i.e. ethanol and biodiesel), chemicals, electricity, pharmaceuticals, and other materials in cost- competitive manner. Loans are eligible for financing under the Business and Industry Guaranteed and Direct Loan Programs. All programs are administered by Rural Development Field Staff. Detailed information about Rural Development programs and applications for financial assistance are available through Rural Development Field Offices or USDA Service Centers. 

Cooperative Services Programs: Promotes understanding and use of the cooperative as a viable organizational option for marketing and distributing agricultural products. Helps rural residents form new cooperative businesses and improve the operations of existing cooperatives.

Value-Added Agricultural Product Market Development Grants - Independent Producers: This grant program seeks to encourage independent agricultural producers to further refine their products for value-added benefits. These grants will facilitate greater participation by farmers in markets for value-added agricultural commodities and facilitate the opening of new markets for value-added products. The proposed project must change the form of an agricultural product, such as processing grain into ethanol, wheat into flour, etc. Eligible activities for grant funds include feasibility studies, business plans, marketing plans, to establish working capital accounts, pay salaries, utilities and operating costs, finance inventories, and purchase office equipment, computers and supplies. The maximum award for any one proposal is $500,000. All applicants must provide matching funds equal to the size of the grant.

Cooperative Development Technical Assistance: Provides assistance for those interested in forming a new cooperative, from an initial feasibility study to the creation and implementation of a business plan.

Technical Assistance: Could include helping a cooperative develop a strategic marketing plan, determine whether to merge or form a joint venture with other coops, or find a way to turn raw products into value-added products. Assistance often includes an analysis of operations or assessing the economic feasibility of new facilities or adding new products or services.

Cooperative Services also conducts research, provides education and information, and collects historical data and statistics. For further information or assistance for cooperatives, contact:

USDA Rural Development/Cooperative Services
Stop 3250
Washington, DC 20250-3250
(202) 720-7558 FAX: (202) 720-4641
email: coopinfo@rurdev.usda.gov