The USDA Rural Intermediary Relending Program (IRP) is designed to stimulate economic development in rural areas by providing financial support for new and expanding businesses. Loan Analytics, a renowned firm specializing in feasibility studies, plays a vital role in conducting USDA feasibility studies for this program, ensuring that projects are viable and aligned with USDA objectives.
Overview of the Rural Intermediary Relending Program
Purpose and Structure: The IRP provides direct loans to private nonprofit corporations, state or local government agencies, Indian tribes, and cooperatives. These intermediaries, in turn, lend the funds to rural businesses, private nonprofit organizations, and other eligible entities. The primary goals are to support economic development projects, establish new businesses, expand existing businesses, create new employment opportunities, and save existing rural jobs.
Statutory Authority: The program operates under multiple legislative acts, including the Health and Human Services Act of 1986 (Section 407, P.L. 99-425), the Food Security Act of 1985 (Section 1323, as amended, P.L. 99-198), and the Community Economic Development Act of 1981 (Section 623, as amended, P.L. 97-35).
Financing and Eligibility
Financing: The Rural Business-Cooperative Service (RBS) administers loans to intermediaries, which then provide loans to ultimate recipients for business facilities and community development projects.
Eligibility Criteria: The program targets community development projects located outside the outer boundary of any city with a population of 25,000 or more.
Funding Levels
Over the years, the loan authorizations and subsidies for the IRP have been as follows:
Loan Authorization:
FY2005: $33.9 million
FY2006 - FY2007: $33.9 million annually
FY2008: $33.0 million
FY2009: $33.5 million
FY2010: $33.5 million
Loan Subsidies (Budget Authority):
FY2005: $15.7 million
FY2006: $14.5 million
FY2007: $14.9 million
FY2008: $14.5 million
FY2009: $14.4 million
FY2010: $8.5 million
The Role of USDA Rural Business-Cooperative Service (RBS)
The USDA Rural Business-Cooperative Service has been at the forefront of rural development for decades, focusing on creating, expanding, and retaining employment in rural areas. Initially centered on agriculture and primary sector jobs, the focus has shifted to manufacturing and technologically sophisticated production requiring higher-skill labor. The RBS supports local entrepreneurs by providing loans and grants, along with specialized technical and marketing assistance.
Rural Economic Development Loans
In addition to the IRP, the Rural Economic Development Loans program offers zero-interest loans to RUS borrowers, who then re-lend the funds at zero interest to rural businesses. This program operates under the statutory authority of 7 U.S.C. 1932(a).
Loan Authorization:
FY2005: $24.3 million
FY2006 - FY2007: $24.7 million annually
FY2008 - FY2010: $33.1 million annually
Loan Subsidies (Budget Authority):
FY2005: $4.6 million
FY2006: $4.9 million
FY2007: $5.4 million
FY2008: $0
FY2009: $7.8 million
FY2010: $4.3 million
The Role of Loan Analytics
Loan Analytics is integral to the success of the USDA feasibility study process for the Rural Intermediary Relending Program. By providing in-depth analyses and insights, Loan Analytics ensures that intermediary organizations can effectively navigate the application process and secure the necessary funding. Their expertise in conducting feasibility studies helps verify the viability and sustainability of economic development projects, aligning them with USDA's goals.
Through their work, Loan Analytics supports the USDA’s mission to enhance economic opportunities in rural areas, contributing to the creation and preservation of jobs, and fostering community growth and development.
Comments