What Are the Requirements for a USDA Business Loan?

The main USDA business loan, the Business and Industry (B&I) Guaranteed Loan, is made by a regular lender and guaranteed by USDA Rural Development. The project must be in a rural area outside any city or town of more than 50,000 people, it must create or save jobs for rural residents, individual borrowers must be U.S. citizens or permanent residents, and the lender must approve the loan with enough collateral to cove…

$25 millionUnder federal rules, a borrower's total B&I loans can be up to $25 million.

When people say "USDA business loan," they usually mean the Business and Industry (B&I) Guaranteed Loan Program from USDA Rural Development. USDA does not lend you the money. A bank, credit union, or other approved lender makes the loan, and USDA guarantees part of it so the lender takes less risk. That means you have to meet two sets of rules: the program's rules (a rural project that creates or saves jobs) and your lender's normal credit standards. Under federal rules, a borrower's total B&I loans can be up to $25 million. For loans approved in fiscal year 2026, USDA guaranteed 85 percent of smaller loans and 80 percent of the largest ones.

Last checked: November 8, 2026. This page explains the rules only. It is general information, not legal, tax, or financial advice.

The short version

You apply through a lender, not directly with USDA. The lender sends the application to USDA Rural Development.
The project must be in an eligible rural area: generally not in a city or town with more than 50,000 people. Your headquarters can be in a bigger city if the project itself is rural.
The loan must help create new jobs or save existing jobs for rural U.S. residents, and the money must stay in the United States.
The lender judges your credit, cash flow, capital, and collateral just as it would for any business loan. Collateral, after the lender's discounts, must at least equal the loan amount.
Interest rates are set between you and the lender. The longest allowed term is 40 years, based on the useful life of what you are financing.
USDA charges an upfront guarantee fee and a yearly retention fee. The lender may pass the guarantee fee on to you.

Who qualifies

For-profit or nonprofit businesses, including corporations, partnerships, and other legal entities.
Cooperatives.
Federally recognized Tribes.
Public bodies.
Individuals who run or plan to start a business. Individual borrowers must be U.S. citizens or legal permanent residents (green card holders), with limited exceptions for certain U.S.-affiliated Pacific islands.
In most cases, owners with a large stake in the business must personally guarantee the loan.
The business can be in manufacturing, wholesale, retail, services, or other activities that provide jobs or improve the economy or environment of rural communities.

What the loan can and can't pay for

Eligible uses include buying, building, expanding, or modernizing commercial or industrial property; buying and installing machinery and equipment; supplies and inventory; permanent working capital; buying a whole business when the loan keeps it running and creates or saves jobs; and refinancing debt when that improves cash flow and creates jobs.

B&I loans can't be used for lines of credit, owner-occupied or rental housing, golf courses, racetracks or gambling facilities, churches or church-controlled organizations, fraternal organizations, or lending, investment, and insurance companies. Farm production is generally excluded unless it is part of a larger business that also processes farm products, though commercial nurseries, forestry, and aquaculture are allowed. Loan money also can't be paid out to an owner who keeps an ownership interest in the business.

How to get it

How to get started

Check your project address on USDA's eligibility map for Business Programs to see if it is in an eligible rural area.
Ask your bank or credit union whether it makes USDA B&I guaranteed loans. USDA's Lender Lens lists lenders that take part in the program.
If your lender is new to the program, it should contact the USDA Rural Development Business Programs Director in the state where the project is located.
Gather what any business lender will want: financial statements, tax returns, cash flow projections, a description of the project, and details on collateral and owners.
Expect the lender to review the "five Cs": character, capacity, capital, collateral, and conditions. It must approve the loan internally before sending it to USDA.
Plan for time. USDA says preparing an application can take anywhere from a few weeks to several months.

Programs that may match

Look beyond

Other USDA Rural Development business programsthe Intermediary Relending Program and the Rural Microentrepreneur Assistance Program fund local lenders that make smaller loans to rural businesses, and Rural Economic Development Loans pass funding through local utilities.USDA Value-Added Producer Grant.SBA microloan requirements.How to get an SBA loan.Using an SBA loan to buy a business.Find other programs you may qualify for with FundPlenty's free match at fundplenty.com.

FAQ

Does USDA lend money directly to businesses?

Not under the B&I program. USDA guarantees loans that banks, credit unions, and other approved lenders make. You apply through your lender, and the lender works with USDA Rural Development.

What counts as a rural area for a USDA business loan?

USDA says eligible areas are rural areas not in a city or town with a population of more than 50,000. Your headquarters can be in a larger city as long as the project is in an eligible rural area. Use USDA's eligibility map to check an address.

How much can I borrow with a USDA B&I loan?

Federal rules cap a borrower's total B&I guaranteed loans at $25 million. The Secretary of Agriculture may approve up to $40 million for rural cooperatives that process value-added farm products.

How much of the loan does USDA guarantee?

USDA sets the guarantee percentage each fiscal year in the Federal Register. For fiscal year 2026, loans under $5 million received an 85 percent guarantee and loans of $5 million to $25 million received an 80 percent guarantee. As of November 8, 2026, USDA had not yet published its fiscal year 2027 B&I notice, so ask your lender for the current figure.

What fees come with a USDA business loan?

USDA lists an upfront guarantee fee of 3 percent of the guaranteed amount and a yearly retention fee of 0.55 percent of the guaranteed portion of the outstanding balance. Some qualifying projects get a reduced 1 percent fee. Lenders may pass the guarantee fee on to the borrower and negotiate their own origination fees.

Can I use a USDA business loan to start a business?

Yes, if the project meets the program rules. Federal rules list start-ups, business acquisitions, and expansions as eligible when jobs will be created or saved, and individuals proposing to start a business can be borrowers. The lender still has to find the loan sound.

What interest rate will I pay?

There is no set USDA rate. The rate is negotiated between you and the lender, and it can be fixed or variable. Variable rates can't be adjusted more often than every quarter.

Do owners have to personally guarantee a USDA business loan?

Usually. Federal rules generally require a personal or corporate guarantee from anyone owning 20 percent or more of the borrower. Passive investors are exempt, and the lender can ask USDA for an exception when the borrower's collateral, equity, cash flow, and profits show an above-average ability to repay.