Government-backed USDA B&I loans.
Long-term financing for rural America.
USDA B&I loans from $500,000. Up to 30-year terms. Up to 85% government guarantee. Competitive rates. Hotels, farms, self-storage, restaurants, medical offices & more. One dedicated loan officer from first call to closing. Originated, underwritten and packaged by UFIG, placed with the USDA-approved lenders in our Capital Network.
24-hour file review • Same loan officer • $500K minimum
Why rural businesses choose UFIG for USDA B&I loans
Our team has been closing USDA B&I loans since 1998. We move quickly while maintaining full USDA compliance and submitting complete, pre-underwritten files.
Government guarantee reduces lender risk and unlocks the lowest possible rates for qualified rural businesses — including those that may not fit conventional lending boxes.
Real estate terms up to 30 years with predictable payments that support long-term rural business growth and preserve operating cash flow.
Dedicated USDA specialists who understand rural America, USDA eligibility requirements, and every eligible business type — from hotels and farms to self-storage and medical offices.
Loan terms & eligible rural business types for USDA B&I loans
UFIG delivers flexible, government-guaranteed USDA B&I loans built around your rural business — from $500,000 with terms designed for lasting success.
How the USDA B&I Guarantee Works, and Who Qualifies
The Business & Industry program is the federal government’s commercial loan guarantee for rural America. USDA does not lend the money; a lender does, and USDA Rural Development guarantees most of it. That guarantee is what turns a 10-year bank balloon into a 30-year fixed-rate loan for a hotel, a manufacturer or a processing plant in a town of 50,000 or fewer. Here is how it works, who qualifies, what it costs, and how UFIG places B&I loans with the USDA-approved lenders in its Capital Network.
How the guarantee works
A B&I loan is a commercial loan from a bank, credit union or non-bank lender in the Capital Network, closed under the lender’s own documents at a rate the lender and borrower negotiate. USDA Rural Development reviews the file and issues a Loan Note Guarantee covering 85% of the loan for requests under $5 million and 80% for $5 million and above (FY 2026). If the loan defaults, USDA pays the lender the guaranteed share of the loss. Because the lender’s exposure is 15 or 20 cents on the dollar, it can offer a longer term, a lower rate and more leverage than it would on an unguaranteed loan to the same business.
The practical effect is that the lender underwrites the deal to USDA’s standards and its own, and USDA concurs. Both have to say yes. UFIG’s job is to build one file that satisfies both: pre-underwritten to the B&I regulation (7 CFR 5001) before it reaches the lender, so the lender’s credit committee and the Rural Development state office are reading the same package.
Who qualifies for a USDA B&I loan
The rural test
The project must be located outside any city or town of more than 50,000 people and its urbanized area. The borrower’s headquarters can be anywhere. USDA’s online eligibility map decides; UFIG checks the address before anything else is done.
Who can borrow
For-profit businesses, nonprofits, cooperatives, federally recognized tribes, public bodies and individuals engaged in business. At least 51% owned by U.S. citizens or permanent residents.
Equity
Tangible balance-sheet equity of at least 10% for an existing business and 20% for a new business or a start-up, measured after the loan closes.
Cash flow and collateral
Lenders look for debt service coverage of about 1.25x on historical or well-supported projected cash flow, and collateral whose discounted value covers the loan. Personal guaranties from owners of 20% or more.
Jobs and community benefit
The loan must create or save rural jobs or otherwise improve the economic or environmental climate of the community. Most real businesses meet this test; the file has to say so.
Feasibility study
Required for new businesses and for most projects where the loan depends on projections rather than history, including new hotels. An independent study is part of the file and the timeline.
What a B&I loan can and cannot finance
| Eligible | Not eligible |
|---|---|
| Purchase, construction, expansion or renovation of commercial or industrial real estate | Lines of credit |
| Business or industrial acquisitions that keep the operation running and save jobs | Owner-occupied or rental housing |
| Machinery, equipment, supplies and inventory | Golf courses, racetracks, gambling facilities |
| Refinancing existing debt when it improves cash flow and supports jobs | Churches and church-controlled organizations; fraternal organizations |
| Working capital (up to 7-year term), including as part of a larger project | Lending, investment and insurance companies |
| Value-added agricultural processing, commercial nurseries, forestry and aquaculture | Agricultural production itself (crops and livestock), except vertically integrated operations |
| Hotels, motels and tourism businesses in eligible rural markets | Distributions or payments to the owners |
Farmland and production agriculture are financed through Farmer Mac and agricultural banks instead; see agricultural loans. A processing plant, packing house, grain elevator or ethanol facility is a B&I deal.
Terms, rates and fees
| Item | USDA B&I (FY 2026) |
|---|---|
| Loan amount | $500,000 (UFIG minimum) to $25 million; up to $40 million for rural cooperatives processing value-added agricultural products |
| Guarantee | 85% under $5 million; 80% at $5 million and above |
| Maximum term | Real estate 30 years; machinery and equipment 15 years or useful life; working capital 7 years. Fully amortizing, no balloon. |
| Interest rate | Negotiated between lender and borrower; fixed or variable. Variable rates may adjust no more often than quarterly. Indicative pricing today from 7.00% (today’s rates). |
| Guarantee fee | 3% of the guaranteed amount, one time, payable at closing and usually financed into the loan (1% for certain qualifying projects) |
| Annual renewal fee | 0.55% of the guaranteed outstanding principal, paid by the lender each year and priced into the rate |
| Prepayment | Set by the lender; many B&I loans carry none or a short step-down |
| Lender origination | Negotiated; UFIG’s fee is disclosed up front |
Program figures from USDA Rural Development’s FY 2026 B&I program terms; lender terms vary by deal.
The 30-year advantage: what the term does to your payment
The guarantee’s biggest gift is time. A bank writing an unguaranteed commercial loan typically amortizes over 20 or 25 years with a 5- or 10-year balloon; a B&I real estate loan amortizes over 30 with no balloon. Set the loan amount and rate to see the monthly payment at each amortization, plus the guarantee and fee your deal would carry.
USDA B&I vs SBA 7(a): which guarantee fits
| USDA B&I | SBA 7(a) | |
|---|---|---|
| Where | Rural areas, population 50,000 or less | Anywhere in the U.S. |
| Who | Businesses of any size that benefit the rural community, including nonprofits and cooperatives | For-profit small businesses under SBA size standards |
| Maximum loan | $25 million ($40 million for ag cooperatives) | $5 million ($10 million combined with a 504) |
| Guarantee | 85% / 80% | 75% (85% under $150,000) |
| Real estate term | 30 years | 25 years |
| Occupancy | No owner-occupancy percentage; rental housing excluded | 51% owner-occupied |
| Guarantee fee | 3% of the guaranteed amount + 0.55% annual (lender) | 0% to 3.75% of the guaranteed amount |
| Timeline | 60 to 120 days; USDA state office concurrence | 30 to 60 days with a PLP lender |
| Best for | Larger rural projects, hotels, manufacturing, processing, projects over $5 million | Smaller owner-occupied deals, acquisitions without real estate, speed |
A rural hotel at $8 million is a B&I deal; a $2 million rural restaurant with working capital may be faster as a 7(a). UFIG places both and will tell you which lender in the Capital Network wants which. See SBA 504 and 7(a) loans.
USDA B&I loans by business type
Hotels and rural hospitality
Flagged and independent hotels in eligible markets, including interstate and resort-area properties. New construction needs a feasibility study. See hotel financing.
Manufacturing and industrial
Plants, expansions and equipment lines where the 30-year real estate term and 15-year equipment term match the asset life.
Agricultural processing
Packing, processing, dairies and creameries, grain handling, meat processing, value-added cooperatives up to $40 million.
Gas stations, C-stores and truck stops
Eligible as rural businesses; environmental review is part of the USDA process.
Self-storage, retail and service
Owner-operated facilities and businesses serving the rural community.
Medical, dental, senior care
Rural clinics, practices and assisted-living operators; also see USDA Community Facilities for nonprofit health facilities.
Business acquisitions
Buying an existing rural business to keep it operating and save its jobs, with or without real estate.
Renewable energy and infrastructure
Solar, biomass and rural energy projects with commercial cash flow; related USDA programs may fit better and UFIG will say so.
Timeline and what to send us
A B&I loan has two approvals: the lender’s and USDA’s. UFIG runs them in parallel. Expect 60 to 120 days from a complete file to closing, with the feasibility study and the environmental review the two items most likely to set the pace. To start a 24-hour read, send:
- Project address (for the rural eligibility check) and a one-page description of the business and the project
- Three years of business tax returns and a year-to-date statement; projections if the project changes the business
- Personal financial statement and three years of returns for each 20%-plus owner
- Purchase agreement, construction budget or payoff statement, as applicable
- Jobs today and jobs after the project
- Any existing feasibility study, appraisal or environmental report
UFIG is a loan correspondent, not a lender. We originate, underwrite and package the B&I file, place it with the USDA-approved lender in our Capital Network that fits the deal, and one loan officer stays with it through USDA concurrence and closing.
Our 4-step USDA B&I
loan process.
Call or submit the form below. Takes minutes. A USDA specialist reviews your deal the same day.
Personalized USDA B&I rate quote within 24 hours — terms, guarantee percentage, and structure.
Streamlined process with our specialists. We pre-underwrite the file before it reaches any lender.
USDA issues the Loan Note Guarantee and the lender closes. One loan officer managed your file start to finish.
USDA B&I Loan FAQ.
Everything you need to know about government-guaranteed rural business financing.
Ready to explore USDA B&I financing?
Start with one conversation.
Every complete file is reviewed within 24 hours. One loan officer manages your deal from first call through closing — no hand-offs, no repeat explanations.
Tell Us About
Your Rural Business Deal.
- Response within 24 hours — often same day
- Dedicated USDA loan specialist
- Up to 85% government guarantee
- Long-term financing up to 30 years
- One loan officer start to close
