Intermediary Relending Program

Establish revolving loan funds for the purpose of providing loans to ultimate recipients to promote community development, establish new businesses, establish and support microlending programs, and increase access to capital for start-ups and other s

This program is to provide loanable funds for small entities. An entity that receives an Intermediary Relending Program (IRP) loan from the Rural Business-Cooperative Service (RBS) is referred to as an intermediary. Intermediaries must relend all of the loan funds received from the IRP loan for business facilities or community development in rural areas. An entity that receives a loan from an intermediary is referred to as an ultimate recipient. The maximum loan to any one intermediary is $2 million. The maximum term is 30 years and the interest rate is one percent per annum. Intermediaries may not use IRP funds to finance more than 75 percent of the cost of an ultimate recipient's project or for a loan of more than $250,000 to one ultimate recipient. (No more than 25 percent of an IRP loan approved may be used for loans to ultimate recipients that exceed $150,000.).

Eligible intermediaries may include: Private nonprofit organizations, State or local governments, and Federally recognized Indian tribes and cooperatives.

Ultimate recipients may include: For profit organizations, individuals, public and private nonprofit organizations.

Intermediaries must have adequate legal authority and a proven record of successfully assisting rural businesses and industries. Ultimate recipients must not be located within a city with a population of 25,000 or more. Both intermediaries and ultimate recipients must be unable to obtain the loan at reasonable rates and terms through commercial credit or other Federal, State, or local programs.

An entity that receives an Intermediary Relending Program (IRP) loan from the Rural Business-Cooperative Service (RBS) is referred to as an intermediary. Intermediaries must relend all of the loan funds received from the IRP loan for business facilities or community development in rural areas. An entity that receives a loan from an intermediary is referred to as an ultimate recipient. The maximum loan to any one intermediary is $2 million. The maximum term is 30 years and the interest rate is one percent per annum. Intermediaries may not use IRP funds to finance more than 75 percent of the cost of an ultimate recipient's project or for a loan of more than $250,000 to one ultimate recipient. (No more than 25 percent of an IRP loan approved may be used for loans to ultimate recipients that exceed $150,000.)

Applicant intermediaries must show a need for the funds and limit the request to an amount they can expect to use within one year. After a loan is approved, the funds are released to the intermediary in multiple advances as required to fund loans to ultimate recipients. Method of awarding/releasing assistance: quarterly.

Potential intermediaries should file applications with the State office for the State in which the intermediary's headquarters is located. The application package includes Form 4274-1 and a written work plan. More details are available in 7 CFR 4274.343, or from the appropriate Rural Development State Office. The Rural Development administers the program on the local level. Intermediaries develop their own application procedures for ultimate recipients.

Factors considered in judging applications include: Financial condition, assurance of repayment ability, equity, collateral, experience and record of managing a loan program or providing other assistance to rural businesses, ability to leverage with funds from other sources, extent assistance would flow to low income persons.

The application of each intermediary will be evaluated by the RD State Office. Applications received by RBS will be reviewed and ranked quarterly and funded in the order of priority ranking.

From 30 to 60 days.

Adverse actions by RBS in connection with this program may be appealed by contacting the Area Supervisor of the USDA National Appeals Division. Appeals will be handled in accordance with 7 CFR 1900-B.