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Rural Economic Development Loan/Grants for Utility Organizations

  • Agency:  USDA Rural Business-Cooperative Service
  • Deadlines in FY24:  March 31, 2024, and June 30, 2024
  • Grant Amount:  up to $300,000 and Loan Amount: up to $2M

Purpose of Funding (fields of work and funding uses):  The Rural Economic Development Loan and Grant programs provide funding for rural projects through local utility organizations. USDA provides zero-interest loans to local utilities which they, in turn, pass through to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas. The ultimate recipients repay the lending utility directly. The utility is responsible for repayment to USDA.

USDA provides grants to local utility organizations which use the funding to establish Revolving Loan Funds (RLF). Loans are made from the revolving loan fund to projects that will create or retain rural jobs. When the revolving loan fund is terminated, the grant is repaid to USDA.

Eligibility:  To receive funding for a grant and/or loan an entity must be:

  • Current Rural Utilities Service (RUS), electric or telecommunication borrower,

  • Any former RUS borrower that has repaid or prepaid an insured, direct or guaranteed loan under the Rural Electrification Act,
  • Or any not-for-profit utility that is eligible to receive an insured or direct loan under such Act.

How funds may be used: 

The local utility passes the funding to ultimate recipients for such eligible projects as:

  • Business incubators.
  • Community development assistance to nonprofits and public bodies (particularly for job creation or enhancement).
  • Facilities and equipment to educate and train rural residents to help economic development.
  • Facilities and equipment for medical care for rural residents.
  • Start-up venture costs, including, but not limited to, financing fixed assets such as real estate, buildings, equipment, or working capital.
  • Business expansion.
  • Technical assistance.

Link to more information: https://www.rd.usda.gov/programs-services/business-programs/rural-economic-development-loan-grant-program/ak