BusinessProgram Opportunities

Overview of Business Programs

Today’s Presenters Include:

Mark Brodziski, Director Specialty Programs DivisionMark.Brodziski@wdc.usda.gov

John H. Broussard, Director, Business and Industry DivisionJohn.Broussard@wdc.usda.gov

Presenters

Business Programs

Lillian Salerno, Acting AdministratorPandor H. Hadjy, Deputy AdministratorMary Ann Clayton, Asst. Deputy AdministratorJohn H. Broussard, B&I Division DirectorWilliam Smith, Energy DirectorMark Brodziski, Specialty Programs Director

Objectives

Become familiar with USDA Rural Development Rural Business—Cooperative Programs:

• B&I Guaranteed Loan Program• Specialty Programs Division• Energy Programs Division• Cooperative Programs

USDA Rural Development

The mission of USDA Rural Development is to increase economic opportunity and improve the quality of life for all rural Americans.

Rural Business Programs

Enhance the quality of life for rural Americans by providing leadership in building competitive businesses including sustainable cooperatives that can prosper in the global marketplace.

We accomplish this by:• Investing financial resources and providing

technical assistance to businesses located in rural communities

• Establishing strategic alliances and partnerships that leverage public, private, and cooperative resources to create jobs and stimulate rural economic activity

Business Programs • B&I Guaranteed Loan Program• Intermediary Relending Program• Rural Business Enterprise Grant Program• Rural Economic Development Loan and

Grant Program• Rural Microenterprise Assistance Program• Rural Business Investment Program• Energy Programs

Business & Industry

Guaranteed Loanmade for state of the

art drilling barge usedwithin inland waters

of the Gulf Coast.

Business & Industry

Chef Paul Prudhomme’s

hometown Andouille and Tasso

Meat processing facility.

Business & Industry

Sells peanuts to Mars Candy to

produce Snickers and peanut M&Ms

Manufacturer of outdoor wrought-iron furniture

FY 2012 Funding (FY 2013?)B&I Guaranteed - $810,511,982IRP - $17,709,563RBEG - $19,405,858REDLG (loan) $79,000,000REDLG (Grant) $10,000,000REAP (Loan) - $32,682,089REAP (Grant) - $16,840,561 VAPG (Grant) - $14,000,000RCDG (Grant) - $5,800,000RBOG (Grant) - $2,370,000

Specialty Programs • Intermediary Relending Program (IRP)• Rural Business Enterprise Grant Program

(RBEG) • Rural Economic Development Loan and

Grant Program (REDLG)• Rural Microenterprise Assistance Program

(RMAP)• Rural Business Investment Program (RBIP)

EXAMPLES OF PROJECTS

Project or Purpose

IRP

RBEG

REDLG

RMAP

RBIP

Capitalize Revolving Loan Funds X X X X

Pass-Through Loans X

Finance Businesses and Community Projects X X X X X

Fund Technical Assistance & Training X X

Finance Incubators and Dev. Centers X X X

Fund Public Facilities, Utilities, and Infrastructure X X X

Investement Fund X

Specialty Programs

Franklin General Hospital, Hampton, Iowa

Sportsmans Resort—Tourism

Timeless Bridal—Retail

North Manufacturing—Mfg

Local Food Enterprise Center

White House Champions of Change

LSU Training Mobile

Rural Business Enterprise Grant

Specialty ProgramsEligible applicants/intermediaries:• Rural public entities (towns, communities,

State agencies, and authorities)• Indian tribes • Non-profit corporations• Some cooperatives for IRP• REDLG is limited to entities eligible for

USDA-RUS Electric & Telecomm

Highlights:• Businesses and projects assisted must

be located in a rural area• Matching or supplemental funding is

generally required• Program funding is competitive• Applications are processed through Rural

Development Area and State Offices

Specialty Programs

Renewable Energy Funding

Opportunities

Rural Energy for America Program

Created in the 2002 Farm Bill as the Section 9006 program

Revised in the 2008 Farm Bill as Section 9007, Rural Energy for America Program

REAP – 3 programs in 1Energy Audits & Renewable Energy

Development Assistance

Feasibility Study grants

Equipment & construction of renewable energy and energy efficiency projects

REAP – Part 1EA/REDA

Renewable Energy Development Assistance/Energy Audit – includes site evaluations for rural small businesses and agricultural producers to utilize more energy efficient measures and to use renewable energy technologies and resources.

REAP - Part 1 - EA/REDAEligible applicants

• Governmental (State, Tribal and Local)

• Institutions of Higher Education • Electric cooperatives • Public power entities

REAP – Parts 2 & 3

Renewable Energy Systems

Wind SolarGeothermalBiomass

Hydro Power Hydrogen

Energy Efficiency Improvements Buildings Industrial (Equipment)

**Replacement**

Feasibility Study GrantsUp to 25% of eligible project costs

Maximum: Lesser of $50,000 or 25% of cost

Minimum: None

Determine Feasibility of Renewable Energy Systems

REAP – parts 2 & 3 Eligibile Applicants

Agricultural ProducersDirectly engaged in ag production 50%+ of gross income comes from ag production

Electric Cooperatives (considered a small business as long as annual electric output is < 4 million MW hours)

Rural Small BusinessesMust meet SBA small business size standards Use NAICS code for industry type: http://www.sba.gov/size/index.html

Renewable Energy

Energy derived from a wind, solar, biomass, or geothermal source; or hydrogen derived from biomass or water using wind, solar, biomass, or geothermal energy sources

Renewable energy systemA system that produces or produces and delivers

usable energy from a renewable energy source.

Energy Efficiency Improvement

Improvements to a facility, building, or process that reduces energy consumption, or reduces energy consumed per square foot.

Eligible Costs

This program is for bricks and mortar projects, so the majority of funds should go towards: Post application purchase & installation of

equipmentPost application construction or project

improvements

Renewable Energy Examples

Solar installation to provide power to a rural small business or farm operation

Wood burning furnace to supply heat to the farm/construction shop

Anaerobic digester for a dairy operation to capture methane, convert it to electricity, and to sell to the local utility

Wind turbines producing electricity to power livestock buildings

Energy Efficiency Improvement Examples

Replace a grocery store’s coolers and freezers with high efficiency models.

Replace ventilation system in dairy barnPurchase a high efficiency grain dryer to

replace an older dryer. Applicant could be an agricultural producer or small grain elevator.

Replace old inefficient furnace in retail shop with high efficiency HVAC system.

Common Inquiries which are INELIGIBLE

Residential improvementsMost common request – Solar to power

home on a farm Projects for Schools, Communities or

not-for-profits Landfill projects (methane gas

extraction)Research and Development projects

Types of Financial Assistance

Grant Only Up to 25% of total eligible costs

Guaranteed Loan Only Up to 75% of total eligible costs

Combination Grant & Guaranteed Loan (Combo)Up to 75% of total eligible costs (grant

cannot exceed 25%)

Funding Limits

Renewable EnergyMinimum grant - $2,500Maximum grant - $500,000Minimum loan - $5,000Maximum loan –

$25 million

Energy EfficiencyMinimum grant - $1,500Maximum grant - $250,000Minimum loan - $5,000Maximum loan –

$25 million

REAP Projects

Cooperative Programs

Value Added Producer Grant (VAPG)Rural Cooperative Development Grant

(RCDG)Rural Business Opportunity Grant

(RBOG)

Value-Added Producer Grant

Purpose: The Value-Added Producer Grant (VAPG) Program is intended to provide grant funds to agricultural producers for planning activities and working capital expenses to assist them in receiving a greater share of the consumer’s dollar for value-added agricultural products

Value-Added Producer Grant

VAPG Applicant Eligible Entities:1. Independent Producer2. Farmer or Rancher Cooperative3. Agricultural Producer Group4. Majority-Controlled Producer-Based

Business Venture

VAPG Product Eligibility1. Change in physical state (e.g. lamb chops,

diced tomatoes)2. Differentiated production or marketing (e.g.

organic) - must reference a business plan3. Product segregation (e.g. identity-preserved

corn)4. Farm-based renewable energy5. Aggregation and marketing as a locally

produced agricultural food product

VAPG Purpose EligibilityPlanning Grants ($100,000 maximum) - activities to

determine the viability of a potential Value-Added venture including feasibility studies, marketing strategies, business plans and legal evaluations.

Working Capital Grants ($300,000 maximum) - to provide funds to operate ventures and pay the normal expenses of the venture including salaries, utilities, inventory, packaging, labels, and marketing expenses.

Rural Cooperative Development Grant

Purpose: The Rural Cooperative Development Grant (RCDG) Program is intended to provide grant funds for establishing and operating Rural Cooperative Development Centers.

Rural Cooperative Development Grant

Program Overview: • Provides grant funds for establishing and

operating Rural Cooperative Development Centers.• Eligible applicants are non-profit organizations and

institutions of higher learning.• Required matching funds equaling 25 percent of

total project costs.• Maximum grant size $175,000

Rural Cooperative Development Grant

Development Activities: • Startup, expansion or operational improvement of

a cooperative.• Development activities include technical

assistance, and research, educational, and advisory services.

• Operational improvement includes making a cooperative more efficient or better managed.

Examples of FY2012 Award Recipients• California Center for Cooperative Development, in Davis, CA will use grant funds

to support an existing Center for Cooperative Development in rural areas of California and Lincoln County Nevada. Projects include farmer, worker, and food cooperative development and education programs.

• The University of Nebraska in Lincoln, NE will used an RCDG award to support an existing Center that will assist rural Nebraska businesses in forming Cooperatives. The Center will offer technical assistance to businesses who are developing or are considering the development of a cooperatively owned business. Services offered include needs assessments, planning assistance to development groups, identifying resources needed, feasibility studies, market analysis, business plans and membership needs and priorities.

• Virginia Foundation for Agriculture, Innovation & Rural Sustainability in Richmond, VA, will use grant funds to support an existing Center, the Cooperative Development Center, that will serve rural areas in Virginia, West Virginia, Kentucky, Tennessee, Maryland and North Carolina.  The Center will facilitate and coordinate technical and financial assistance to advance agricultural economic development by assisting in the formation and growth of cooperative businesses.

Rural Business Opportunity Grant

Program Purpose:1. Promote sustainable economic development

that uses local resources2. Assist rural communities with identifying

their needs and taking advantage of available resources and opportunities

3. Focus assistance on priority communities4. Sponsor “best practice” economic

development activities that are transferable

Rural Business Opportunity Grant

Eligible Applicants:• Public bodies (e.g. state and local

governments)• Nonprofit corporations• Indian tribes• Cooperatives with members that are primarily

rural residents• Institutions of higher education

Rural Business Opportunity Grant

Eligible Use of Funds:• Identifying and analyzing business

opportunities that will use local resources• Providing training to entrepreneurs and

managers• Establishing business support centers• Conducting leadership training

Note: Grant funds may not be used to buy or develop real estate or for construction.

Alliances and Partnerships• Community Banks and Commercial Lenders• Local Utilities• Community Development Financial Institutions (CDFI)• Other Federal Agencies—SBA, EDA, Commerce, etc.• Universities and Community Colleges • Local/Regional Councils of Government and Regional

Planning Commissions• Community Action Agencies• County and local community and economic

development organizations

Any Questions?

Web Links• USDA Rural Development

www.rurdev.usda.gov

• Rural Business-Cooperative Service www.rurdev.usda.gov/rbs

• Rural Area Eligibility – www.rurdev.usda.gov/rbs

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual’s income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD).

To file a complaint of discrimination, write: USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider, employer, and lender.