USDA B&I Loan Business Plan

The USDA Business & Industry Guaranteed Loan Program, commonly called USDA B&I, helps eligible rural businesses access commercial financing through approved lenders. USDA Rural Development does not typically make the loan directly to the business. Instead, it provides a guarantee on an eligible portion of a loan made by a participating lender.

Eligible borrowers can include for-profit businesses, nonprofit organizations, cooperatives, federally recognized Tribes, public bodies, and individuals engaged or proposing to engage in business. The borrower and project must also satisfy USDA program requirements and the participating lender's underwriting standards.

In most cases, the financed project must be located in an eligible rural area. USDA generally defines eligible locations as areas outside a city or town with a population greater than 50,000. A business may have its headquarters in a larger urban area as long as the project being financed is located in an eligible rural area.

Eligible uses can include business expansion, modernization, repair, development, commercial land and buildings, machinery and equipment, supplies, inventory, qualifying business acquisitions, and certain debt refinancing. The specific use of funds must satisfy USDA program rules and lender requirements.

For Fiscal Year 2026, USDA provides an 85% guarantee for eligible B&I loan applications requesting less than $5 million and an 80% guarantee for applications requesting $5 million or more. The guarantee protects the lender on the guaranteed portion of the financing and does not represent a grant or direct payment to the borrower.

No. Businesses generally apply through an eligible participating lender. The lender evaluates the borrower, project, collateral, financial performance, repayment capacity, and overall credit risk. The lender then works with USDA Rural Development to obtain the loan guarantee for an eligible transaction.

A detailed business plan is commonly important for USDA B&I financing because the lender and USDA need to understand the business, project, market opportunity, management team, financing request, use of funds, operating strategy, financial assumptions, and expected ability to repay the debt. Documentation requirements can vary depending on the transaction.

A USDA B&I business plan should typically include a company overview, ownership and management background, products or services, rural market analysis, customer segments, competitive positioning, operating plan, employment impact, financing request, detailed use of funds, project costs, historical and projected financial performance, cash flow projections, debt service, and repayment strategy.

Lenders may review historical financial statements, projected revenue, profitability, operating expenses, cash flow, existing debt, equity investment, collateral, project costs, debt-service capacity, and the assumptions supporting the forecast. The lender must determine that the business can reasonably support the proposed financing.

Loan terms depend on the use of funds, useful economic life of the financed assets, collateral, and repayment ability. USDA B&I financing can have a maximum term of up to 40 years where appropriate, although actual terms are determined by the lender and transaction structure.

Interest rates are negotiated between the participating lender and borrower and may be fixed or variable. The final rate depends on the lender, borrower qualifications, financing structure, market conditions, collateral, and overall risk profile of the transaction.

Yes. For Fiscal Year 2026, USDA lists an initial guarantee fee of 3% of the guaranteed portion of the loan and an annual guarantee retention fee of 0.55% of the guaranteed outstanding principal. Additional lender, legal, appraisal, environmental, closing, or third-party costs may also apply.

Yes, qualifying business acquisitions may be eligible when the transaction meets USDA requirements and the lender can demonstrate that the acquisition is financially sound. The financing structure, purchase price, collateral, equity contribution, management experience, and projected cash flow will generally be important parts of the lender's review.

Certain debt refinancing may be eligible under the USDA B&I Program when program conditions are satisfied. Eligibility depends on the purpose and history of the existing debt, the proposed refinancing structure, lender analysis, and USDA requirements.

Mikel Consulting prepares lender-ready business plans designed to support USDA B&I financing applications. We help present the business, rural project, financing request, use of funds, market opportunity, management team, operating strategy, financial projections, and repayment capacity in a clear and professional format for lender and USDA review.

Most USDA B&I business plans are completed within 7-10 business days once we have the required information. Timing can vary depending on project complexity, financing amount, business structure, level of market research required, and the amount of financial information already available.

No. We prepare professional business plans designed to support the financing process, but we cannot guarantee approval. The participating lender makes the credit decision, and USDA determines whether the proposed transaction satisfies the requirements for its loan guarantee.

Our USDA B&I business plans start at $1,000 USD. This typically includes a professionally written business plan, U.S. and rural market research, financial projections, financing request, use of funds analysis, and delivery in PDF and editable formats. Most plans are approximately 30-40 pages and are completed within 7-10 business days.