California Community Economic Revitalization Team
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California Community Economic Revitalization Team |
Intermediary Relending Program (IRP) |
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Agency: USDA Rural Development
Program: Intermediary Relending Program (IRP)
Program Description: The purpose of the Intermediary Relending Program is to finance business facilities and community development projects in rural areas. This is achieved through loans made by USDA Rural Development to public or non-profit intermediaries. The intermediaries relend the funds to ultimate recipients for business facilities or community development. Intermediaries establish revolving loan funds, so that collections from loans made to ultimate recipients, in excess of necessary operating expenses and debt payments, will be used for more loans to ultimate recipients.
All of the IRP loan funds received by an intermediary must be reloaned to ultimate recipients. Interest income and fees may be used for administrative costs, technical assistance to borrowers, or debt retirement. All collections from the operation of the IRP revolving loan fund that are not used for the above authorized expenses, must be made available to relending to eligible ultimate recipients.
Loans from intermediaries to ultimate recipients must be for the establishment of new businesses, the expansion of existing businesses, creation of employment opportunities, saving of existing jobs, or community development projects.
Eligibility: Intermediaries may be private nonprofit corporations, public agencies, Indian groups or cooperatives. Intermediaries must: be bonded; have legal authority to carry out the proposed loan purposes and to incur and repay debt; have a record of successfully assisting rural business and industry, normally including experience in making and servicing commercial loans; and provide adequate assurance of repayment. Any type of legal entity, including individuals and public and private organizations, may be an ultimate recipient. At least 51 percent of the owners or members of both intermediaries and ultimate recipients must be United States citizens or admitted for permanent residence. Both intermediaries and ultimate recipients must be unable to obtain the proposed loan elsewhere at reasonable rates and terms.
Funding Information: The interest rate on loans to intermediaries is one percent per annum. The intermediary sets the interest rate charged to ultimate recipients. All loans to intermediaries must be adequately secured. Intermediaries are asked to provide a proposal for securing the loan, for USDA's consideration, in the application. Intermediaries are also required to provide written security policies for loans to ultimate recipients.
Timelines: Applications are accepted year round.
Contact:
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