Economic Development Grants-USDA

In general, most economic development organizations are part of municipal, county, or state governments. In some cases, such organizations are independent but have local elected officials as board members. Many of the most effective economic development organizations are those which cover several political jurisdictions- i.e., multiple counties. These entities have a strategic advantage in grant seeking due to the fact that state and federal funding sources generally prefer a collaborative effort. The reason for this is that generally such projects can exhibit a greater benefit and public purpose.

The United States Department of Agriculture’s Rural Development Administration offers several programs which benefit economic development efforts. One of the most popular is the Rural Business Enterprise Grant (RBEG). This program was designed to assist “small and emerging businesses” in rural areas with populations of less than 50,000. However, priority is given to those communities and areas with a population less than 25,000.

“Small and emerging business” is defined as any enterprise with fifty or fewer employees and less than $1 million in gross revenues. Applications are accepted on a continuing basis. Funds have been used to create revolving loan funds which are under the control of a local government, which is then free to create its own guidelines within certain parameters. The grantees must ensure that the loan program provides optimal benefit to the businesses which borrow from it and serves a public purpose, such as job creation and/or an increase in the tax base. These funds may also be used to pay for infrastructure such as water and sewer or streets in support of new businesses which may be moving into the area. Projects given a high priority by USDA are those which create a significant number of jobs or which may introduce a new technology or industry into an area. Information about this program may be found at http://www.rurdev.usda.gov/rbs/busp/rbeg.htm.

Another USDA program which provides funding for revolving loan funds is the Intermediary Re-lending Program. This is very similar to RBEG in its requirements and application forms. There are no specific deadlines for application submission. The small businesses which become the borrowers may receive up to $250,000 in loans. Individuals may borrow funds from the intermediary.

The entire listing of business programs available from the USDA Rural Development Administration can be found at http://www.rurdev.usda.gov/rbs/busp/bprogs.htm. The programs not specifically discussed here fund rural utilities, including electric coops; telemedicine; broadband; sustainable energy; and a wide variety of other projects.