USDA (United States Department of Agriculture) B & I (Business & Industry) loans were set up in an effort to improve rural communities, by assisting in the creation of and saving jobs. Securing financing in small towns is often a very difficult tasks as most national and regional banks will NOT lend to borrowers with commercial real estate located in communities with less than 50,000 people. This program fills that void.
The benefits with the USDA B & I program are many. Higher leverage (up to 80%), and relative flexible underwriting standards top the list. Loan amounts range from $500,000 to $25,000,000. B & I loans are normally amortized over 30 years, which can have a dramatic increase in cash-flow compared to a 20 year schedules which is more common with small town local banks.
Criteria for USDA Loans
- Any legal entity including individuals, public and private organizations and federally recognized Indian tribal groups.
- There is no size restriction on the business
Use of Proceeds
- B&I Loans may involve acquisitions, construction, conversion, repair, modernization or debt refinance
- Loan proceeds can be used for real estate acquisition and/or improvements, machinery, equipment, furniture, fixtures and working capital. Closing costs and guarantee fees are also eligible meaning you can roll the closing costs into the loan amount.
- All B&I Loans are fully amortized with no balloons or call dates
- Repayment terms are up to 30 years for real estate and improvements, up to 15 years (or useful life) for machinery, equipment, furniture and fixtures and up to 7 years for working capital.
- Rates are based on a spread over the Prime Rate. Rates vary depending on the specific strengths of the transaction.
USDA Loan Application
We hope that the above information has answered most of your questions concerning USDA loans and that you will make Metro City Bank your first choice for your USDA loan. If you need further information, contact Metro City Bank, and ask to speak to a loan officer or call us at 770-455-4989.