Glossary term
Business & Industry (B&I) Loan Guarantee Program
The Business & Industry Loan Guarantee Program is a USDA Rural Development program that guarantees loans made by approved lenders to eligible rural businesses.
Updated
Read time
What Is the Business & Industry Loan Guarantee Program?
The Business & Industry Loan Guarantee Program, often called the B&I program, is a USDA Rural Development program that guarantees loans made by approved lenders to eligible rural businesses. The guarantee reduces lender risk, which can help rural businesses access financing that might otherwise be difficult to obtain.
The program is not a direct loan from USDA to the borrower in the ordinary structure. A private or participating lender makes the loan, and USDA provides a guarantee on an eligible portion of the lender's loss if the borrower defaults.
Key Takeaways
- The B&I program supports eligible businesses in rural areas through loan guarantees.
- Loans are made by approved lenders, not usually directly by USDA.
- Funds may support business acquisition, expansion, working capital, equipment, real estate, or other eligible uses.
- Eligibility depends on location, borrower type, lender requirements, and program rules.
- A guarantee can improve credit access, but the borrower still takes on debt that must be repaid.
How the Program Works
A business works with a lender that participates in USDA Rural Development programs. The lender underwrites the loan, reviews repayment ability, collateral, management, and business purpose, then applies for a USDA guarantee if the project appears eligible.
If approved, USDA guarantees a portion of the lender's exposure. The guarantee does not remove the borrower's repayment obligation. It gives the lender added protection, which may make financing more available for rural projects that support local economic activity.
Common Program Uses
Use | How It May Help |
|---|---|
Business expansion | Finances facilities, equipment, or growth plans |
Working capital | Supports operating needs when eligible |
Business acquisition | Helps preserve or transfer rural businesses |
Real estate or equipment | Funds productive assets for eligible business use |
Debt refinancing | May be allowed when program conditions are met |
Borrower and Lender Considerations
The guarantee can be valuable, but borrowers should still evaluate interest rate, collateral requirements, personal or business guarantees, covenants, fees, term length, and cash-flow capacity. The right loan is one the business can service through normal operations, not only one that can be approved.
Because eligibility and guarantee terms can change, businesses should confirm current rules with USDA Rural Development and a participating lender before relying on the program for a financing plan.
The Bottom Line
The B&I Loan Guarantee Program helps eligible rural businesses access lender financing by reducing lender risk. It can support rural economic development, but the business still needs a repayment plan strong enough to carry the debt.