OCC Report: USDA’s Business and Industry Guaranteed Loan Program

This report provides an overview of the U.S. Department of Agriculture (USDA), Rural Business Programs, Business and Industry (B&I) Guaranteed Loan Program. In fiscal year (FY) 2011, the B&I Guaranteed Loan Program provided federal loan guarantees on 511 commercial loans (totaling $1.4 billion) to rural businesses. The program helps lenders and borrowers improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. The program provides guarantees of 60, 70, or 80 percent, depending on loan size, with loans over $10 million guaranteed on an exception basis. Originating lenders benefit from loan guarantees that protect against much of the credit risk associated with lending in rural areas. Loans that meet the Community Reinvestment Act (CRA) criteria of small business loans or community development loans may be considered in an institution's CRA examination.