If you’re interested in starting a business, you’ve probably looked at many different governments loan programs. However, some of the least known loans are those offered by the USDA.
The USDA’s business program offers financial backing and assistance to stimulate business creation and growth. It works through public and private community-based organizations to assist rural businesses.
USDA business loans can be used for many things, including business conversions, enlargements and modernizations, commercial real estate purchase, machinery or inventory purchase, working capital, and even debt refinancing.
To be eligible for a USDA loan, you must meet the requirements. You must be a US resident, noncitizen national, or permanent resident alien. You must be located in a rural area, which is defined as any area other than a city with a population of over 50,000 people. You also must be an eligible type of borrower. Borrowers can include for-profit businesses, nonprofit businesses, federally recognized tribes, public bodies, and individuals. Private companies must confirm that the loan funds will remain in the United States to create or save existing jobs for rural residents.
In addition to those requirements, your business must also have sufficient cash flow to support loan repayments, and the business and its owners must have a good credit history. This means several years of credit history with a credit score of 680 or above for individuals. Businesses need to have a history of on-time payments, low credit utilization, and no derogatory remarks.
If you’re interested in starting or funding a business outside an urban environment, you may want to consider applying for a USDA loan. USDA loans are designed to help people in rural areas purchase and improve their businesses. If you need more information on applying for a USDA loan, you can contact Aspen Commercial Lending for more information.