USDA offering loans for business

At least one part of the federal government is flush with cash, ready to guarantee loans for businesses.

The U.S. Department of Agriculture's Rural Development office in New York has about $58 million available for its business and industry guaranteed loan program to promise before Sept. 30.

"We encourage businesses to apply early because there may be a point in time when the funds that haven't been spent will be collected and put in a national pool," said Timothy Jones, special projects coordinator with the agency office in Syracuse.

The program provides loan guarantees to lending institutions for businesses to retain or add jobs and improve, develop or buy land, buildings, machinery or supplies.

The state office was allocated $83,911,000 for the program: $53.7 million through the American Recovery and Reinvestment Act and $30.3 million through a standard annual allocation.

About $36 million in stimulus funding and $22.5 million in regular funding remain.

"We normally spend all the fiscal year allotment," Mr. Jones said. "With ARRA, we have so much more money than we're accustomed to, so this is a one-time opportunity where more businesses can get a guarantee."

The stimulus funding has the advantage of offering up to 90 percent guarantees as opposed to the standard 80 percent.

It also has no annual renewal fees and has a lower guarantee fee of 1 percent as opposed to 2 percent.

Any business besides farms, golf courses and those that receive more than 10 percent of their revenue from gambling are eligible for the loan guarantee.

The business must be in an area with a population of 50,000 or fewer.

"We encourage banks especially to give us a call," Mr. Jones said.

ON THE NET

USDA Business & Industry Guaranteed Loan Program: www.rurdev.usda.gov/rbs/busp/b&i_gar.htm