Which USDA Rural Development programs are funding work in 2026, how the Business & Industry guaranteed loan differs from a grant, when USDA requires an independent feasibility study, and how to select a consultant the lender and the Agency can rely on.
Businesses, nonprofits, communities, agricultural producers and economic development organizations searching for USDA grants and USDA loans in 2026 have access to a range of Rural Development programs designed to strengthen rural businesses and communities.
For businesses pursuing larger financing projects, the USDA Business & Industry Guaranteed Loan Program — commonly called USDA B&I — can provide lender-backed financing with a USDA loan guarantee.
USDA feasibility studies can also play an important role in both USDA grant planning and USDA B&I underwriting. Certain USDA grant programs can support feasibility-study activities, while some B&I transactions require an independent feasibility study to establish market, technical, financial, economic and management viability.
Trying to understand the difference between USDA grants and USDA B&I financing? This two-minute overview explains how USDA business funding works, where feasibility studies fit into the process and why choosing an experienced independent feasibility consultant can matter to lenders and USDA reviewers.
0:00 — USDA grants and USDA B&I loans solve different problems. A grant funds specifically authorized activities. A B&I loan is commercial debt made by a lender, with USDA guaranteeing part of it. Knowing which one you are pursuing changes the evidence you need.
0:24 — Two programs usually answer the question, can a grant pay for the study. Rural Business Development Grants list feasibility studies among eligible activities, although the applicant is generally a public body, a Tribe, or a nonprofit. Value-Added Producer Grant planning grants can fund a study for eligible producers.
0:49 — The Business and Industry Guaranteed Loan Program takes lender applications on an ongoing basis, October 1 through September 30. For fiscal year 2026, USDA states that applications under $5 million receive an 85% guarantee, and $5 million or more receive 80%. A guarantee is not repayment capacity.
1:17 — For a B&I loan greater than $1 million to a new business, USDA requires a feasibility study prepared by an independent qualified consultant acceptable to the Agency. USDA defines that consultant by knowledge, expertise, and experience, not by price. The cheapest report becomes the most expensive one if underwriting sends it back.
1:44 — Wert-Berater. Independent feasibility studies since 1998. 3,969 studies completed, and over $41.2 billion in project value evaluated. Start the conversation by clicking Schedule a Zoom Call to meet and speak with us.
USDA Rural Development runs its competitive grant programs on annual, phase-based and rolling cycles, so the practical question in any given month is not “what does USDA fund?” but “which window is open, and what does it require?” As of September 9, 2026, the programs most relevant to rural business and processing projects fall into three groups.
Open now. The Meat and Poultry Processing Expansion Program is accepting Phase 3 applications from September 8 through December 7, 2026, for eligible processing-capacity investments. The Rural Decentralized Water Systems Grant Program is open from July 28 through September 30, 2026, funding qualified nonprofits that operate revolving loan programs for rural household water and wastewater systems.
Closed for FY2026, expected to return. Rural Business Development Grants closed June 15, 2026 for Strategic Economic and Community Development applications and June 30, 2026 for all other FY2026 applications. Value-Added Producer Grants ran from February 17 to April 22, 2026. Both are the programs that most often pay for planning work, which is why the months between cycles are the right time to scope a study rather than the weeks before a deadline. Our USDA Rural Development grant schedule tracks the wider calendar, including FIELDS and the water and telecommunications programs.
Paused or pending. USDA is not currently accepting new Rural Energy for America Program grant applications while regulatory updates are completed; the agency has stated that REAP guaranteed-loan applications may continue in the meantime. The Rural Economic Development Loan & Grant Program shows a first-quarter FY2027 date of September 30, 2026, contingent on publication of the final Notice of Funding Opportunity.
Eligibility differs sharply between these programs. Several of the grant programs are not open to for-profit businesses at all: they fund public bodies, federally recognized Tribes, nonprofits and cooperatives that in turn assist rural businesses. Confirm applicant eligibility before you build a funding plan around a grant.
Federally recognized Tribes, Tribal enterprises and Tribal colleges reach several of these programs through different eligibility routes, and two of them are Tribal-specific. Those routes are set out in our guide to Tribal USDA grants and B&I loans.
USDA’s business lending works differently from its grant programs. Rural Development does not usually lend directly to a business in this space; instead, an eligible commercial lender makes the loan and USDA guarantees a portion of the lender’s exposure. That structure is why B&I applications are submitted by the lender rather than the borrower, and why the analysis USDA reads is fundamentally credit analysis.
The consequence for a borrower is simple: a guarantee improves the lender’s risk position, but it does not establish that the project can repay the debt. Repayment capacity still has to be demonstrated from market evidence, operating assumptions, management capability and a financial model that reconciles with all three. That is the work an independent feasibility study performs.
USDA B&I is the Business & Industry Guaranteed Loan Program. USDA B&I is not a grant. A participating lender makes a loan to an eligible rural business, and USDA guarantees an eligible portion of that lender’s loan. The borrower repays the lender on commercial terms.
Subject to program eligibility rules, financing can support:
Not every project qualifies. Rural area definitions, business type, applicant structure, use of proceeds, collateral and credit quality all bear on eligibility, and the determination is USDA’s to make on the lender’s application. Treat the list above as the range of what the program can finance, not as a statement that a particular project will be approved. Our guide to USDA B&I business and industry loans walks through the program in more depth.
For FY2026, USDA states that applications requesting less than $5 million receive an 85% guarantee, and applications of $5 million or more receive an 80% guarantee.
Current FY2026 information — verify before relying on these percentages for a future fiscal year. Guarantee levels are set by USDA and can change between fiscal years; do not carry FY2026 percentages into FY2027 without checking the current notice.
Two Rural Development programs are the usual answer to the question “can a USDA grant pay for the study?”
Rural Business Development Grants. USDA identifies feasibility studies and business plans among eligible RBDG activities, alongside market research, technical reports, technology-based economic development, entrepreneur training and long-term business strategic planning. The catch is on the applicant side: USDA’s current RBDG guidance identifies eligible applicants as public bodies and government entities, federally recognized Tribes, and nonprofit entities serving rural areas — the projects funded may benefit qualifying small and emerging rural businesses, but the business itself is generally not the applicant.
Value-Added Producer Grants. The VAPG program supports planning activities that can include feasibility studies, business plans and marketing plans. For FY2026, USDA listed planning grants of up to $50,000 and working-capital grants of up to $200,000, subject to program eligibility and matching requirements. A producer typically uses the planning grant to test a value-added product line before committing to it; our VAPG feasibility study guide covers what that planning work has to contain.
A third pattern is worth naming, because it changes the sequence of a project: an eligible economic-development organization can use an RBDG award to fund a feasibility study benefiting rural businesses, and a business that emerges from that planning work can later pursue B&I financing for the resulting project. Planning money and project money come from different programs, on different clocks.
USDA determines the required scope of that study based on the complexity of the borrower and the project. A $2 million equipment expansion for an established manufacturer does not carry the same analytical burden as a $25 million greenfield facility entering a new market, and the scope should be settled with the lender and the Agency before the consultant finishes the work rather than after.
The definition of a “new business” is broader than most borrowers expect. Under Part 5001, it can include a company that has operated for at least a year but has not reached full operational capacity or stable operations, and it can include a new enterprise or affiliate of an existing company expanding into a new location involving a new market or labor area. An established company can therefore trigger the requirement through the shape of the project rather than the age of the entity.
Below the $1 million threshold, USDA may still require an independent study — typically when the lender’s analysis and the borrower’s information do not adequately establish technical feasibility, market feasibility or economic viability, or when the project would significantly affect an existing borrower’s operations and historical cash flow. More generally, the Agency can require one whenever the application package does not provide an adequate basis for determining successful repayment. Our USDA B&I feasibility study guide maps the requirement against the rest of Part 5001, and the 7 CFR 5001 compliance checker tests a draft against the regulation section by section.
The phrase “USDA-compliant feasibility study” is common in the lending industry, but the standard is regulatory. Under 7 CFR Part 5001, USDA defines a feasibility study as a report containing an opinion or finding prepared by an independent qualified consultant evaluating the economic, market, technical, financial and management feasibility of the proposed project or operation and its expectation for success. USDA defines a qualified consultant as an independent third-party person possessing the knowledge, expertise and experience to perform the specific task required.
Appendix A to Subpart D of Part 5001 provides the framework. It expects five analyses, plus an executive summary, a recommendation containing the consultant’s opinion, and the qualifications and prior experience of the study’s author. The 37 factors listed in Appendix A are the checklist most reviewers work from.
Whether the project makes economic sense given the resources required to operate it: labor, infrastructure, utilities, raw materials or feedstocks, contracts, environmental risks, project costs, expected benefits, new markets and broader economic-development impact. Rural projects fail this test more often than urban ones, because a technically sound business can still be constrained by labor supply, transportation or utility capacity.
Current and future demand for the product or service — target market, existing and future competition, current and prospective customers, market size and growth, pricing, sales assumptions, customer concentration, distribution channels, contracts or purchase commitments, industry risks, and the project’s realistic ability to capture share. The objective is not to prove a large industry exists. It is to determine whether this project, in this location, at this capacity and this price can achieve the projected sales. That is the discipline behind a genuine market feasibility analysis.
Whether the project can physically and operationally deliver what the financial model assumes: site suitability, facility capacity, equipment, technology, production processes, utilities, raw-material supply, transportation access, construction requirements, staffing, vendors, logistics and the operating history of the proposed process. A projection showing $20 million of annual revenue means little if the plant, equipment, staffing or supply chain cannot produce it.
Whether the business can generate sufficient income, credit and cash flow to sustain operations over the long term and service its obligations. A credible section reconciles the market and operational analysis with the model — revenue, pricing, volume, operating expenses, labor, cost of goods sold, margins, working capital, capital expenditures, debt service, borrower equity, ramp-up and downside sensitivity. USDA’s lender-credit requirements also state that increases in revenue, margins or profitability that depart from historical performance should be reasonable and substantiated. Coverage is where that lands in underwriting; see how DSCR expectations compare across SBA, USDA and conventional lenders.
Whether the people responsible can execute: the legal and ownership structure of the business, and the background, experience, skills and qualifications of management. This matters most where the risk is highest — a borrower entering a new industry, expanding into a new market, materially increasing capacity, or completing a complex acquisition.
A USDA feasibility study is not simply a business plan or set of financial projections. The analysis should independently test whether market demand, operations, management and financial assumptions support a reasonable expectation of project success — and it should say so in a written conclusion, rather than presenting information and leaving the lender to infer what it means.
For a USDA feasibility study, consultant selection should be based primarily on qualifications, independence and relevant experience — not simply the lowest price. USDA defines a qualified consultant around independence, knowledge, expertise and experience; for B&I loans over $1 million to a new business, the consultant must also be acceptable to the Agency. The consultant’s qualifications and prior experience are themselves part of the Appendix A framework, which means the reviewer reads them as part of the study.
A practical selection checklist:
The cheapest proposal can become the most expensive option if the resulting study must be substantially revised or replaced during underwriting. USDA does not define a qualified consultant by price, and nothing in the regulation requires the most expensive one — the test is whether the named professional has the knowledge, expertise and experience the assignment demands. Fees for a full study are published on our feasibility study cost page.
Ask who will actually prepare and sign the report, and review that person’s project history rather than the firm’s marketing. Then ask what happens after delivery: a study that no one will defend through a credit committee and an Agency review is worth less than its page count suggests.
Last verified against USDA Rural Development sources: September 9, 2026
| Program | Type | Status | Deadline | Feasibility connection |
|---|---|---|---|---|
| Meat and Poultry Processing Expansion Program — Phase 3 | Grant | Open | Applications accepted September 8 – December 7, 2026 | Eligible processing-capacity investments. Applicants should review the current USDA NOFO. |
| Rural Decentralized Water Systems Grant Program | Grant | Open | July 28 – September 30, 2026 | Grants to qualified nonprofits operating revolving loan programs for rural household water and wastewater systems. |
| Rural Economic Development Loan & Grant Program | Loan & grant | FY2027 window pending final NOFO | First-quarter date shown as September 30, 2026, contingent on FY2027 NOFO publication | Supports rural job creation through eligible utility intermediaries; verify against the final NOFO. |
| Rural Business Development Grants | Grant | Closed for FY2026 | June 15, 2026 for Strategic Economic and Community Development applications; June 30, 2026 for remaining FY2026 applications | USDA identifies feasibility studies and business planning among eligible rural business-development activities. |
| Value-Added Producer Grants | Grant | Closed for FY2026 | February 17 – April 22, 2026 | Planning grants can support activities including feasibility studies, business plans and marketing plans. |
| Rural Energy for America Program grants | Grant | Not currently accepting grant applications | New grant window pending regulatory updates | USDA states REAP guaranteed-loan applications may continue while new grant awards are paused. |
| Business & Industry Guaranteed Loan Program | Loan guarantee — not a grant | Open | Lender applications accepted on an ongoing basis, October 1 – September 30 | Independent feasibility studies are required for certain B&I transactions and may be required in additional situations. |
Important: this is not an exhaustive USDA funding calendar. Program windows, appropriations, state requirements and Notices of Funding Opportunity can change. Verify current requirements through USDA Rural Development and the applicable federal funding notice before relying on any deadline here.
A USDA grant and a USDA B&I guaranteed loan solve different financing problems. A grant funds specifically authorized activities and does not behave like commercial debt. A B&I loan is commercial debt, made by a lender, with a federal guarantee sitting behind part of it.
| USDA grant | USDA B&I guaranteed loan | |
|---|---|---|
| Repayment | Generally no repayment when program requirements are satisfied. | Commercial loan must be repaid. |
| Funding source | USDA-funded award. | Eligible lender makes the loan; USDA guarantees a portion. |
| Applicant | Depends heavily on the program — often public bodies, Tribes, nonprofits and cooperatives rather than businesses. | Lender submits the guaranteed-loan application for an eligible borrower and project. |
| Competition | Frequently competitive, scored against other applications in a window. | Credit underwriting plus the USDA eligibility process; no scoring window. |
| Feasibility study | May be an eligible planning activity under certain programs. | May be required; mandatory for certain new-business transactions greater than $1 million. |
A well-managed feasibility engagement starts before the study is commissioned and ends after the Agency has read it. Fourteen steps, in the order they actually occur:
The most common failure in a rejected study is a market section and a financial model that were written as if they were separate documents. Industry growth rates do not produce revenue; a defined customer base, at a defensible price, within a reachable trade area does. If the model assumes a share of a market the study never sized, the reviewer has no basis to accept the forecast — and the fastest way to lose a credit committee is to ask it to take the top line on faith.
Revenue is a physical claim before it is a financial one. A plant that can run a certain number of shifts, on a certain line speed, with a certain yield, has a production ceiling — and the ceiling either supports the forecast or it does not. Reconciling the two is arithmetic, but it is arithmetic that a surprising number of studies never show.
In a startup or a change-of-ownership transaction, the operating history that underwrites the loan belongs to someone other than the person who will run the business. That gap is a risk, and USDA asks about it directly. A study should evaluate the specific experience the project requires — this industry, this scale, this kind of build — rather than reciting résumés.
Commissioning the study at the end of underwriting inverts its purpose. Its value lies in testing assumptions while they can still change: a site that will not support the throughput, a price point the market will not bear, a construction schedule that pushes the ramp into a second season. Found early, those are design decisions; found late, they are re-submissions. The grant calendar compounds the point — a study started against a 30-day application clock is a study written under the wrong constraint.
An independent consultant is engaged to test the project, which means being willing to identify weaknesses and recommend mitigation. A report that reaches a favorable conclusion on every assumption it was handed tells a reviewer nothing about the risks — and reviewers who read hundreds of these documents recognize the pattern immediately.
The audience for a USDA feasibility study is not the borrower. It is the lender’s credit committee and the Agency reviewer, and they read for different things: coverage under stress, the basis for each assumption, the treatment of concentration and contract risk, and whether the conclusion follows from the evidence. A consultant who has worked inside that review process writes to it. One who has not tends to produce a report that reads well and underwrites poorly. Several of the recurring failure modes are collected in our note on why feasibility studies get rejected.
As of September 9, 2026, the Meat and Poultry Processing Expansion Program (Phase 3) and the Rural Decentralized Water Systems Grant Program are open. Rural Business Development Grants and Value-Added Producer Grants have closed for FY2026, REAP grant applications are paused pending regulatory updates, and the Rural Economic Development Loan & Grant Program awaits a final FY2027 notice. Verify each program against its current USDA notice before applying.
Some USDA programs fund businesses directly and others do not. Several Rural Development grant programs are open only to public bodies, federally recognized Tribes, nonprofits and cooperatives, which then assist rural businesses. Eligibility is program-specific and is determined by USDA.
Certain programs expressly allow feasibility-study activities. Rural Business Development Grants list feasibility studies among eligible uses, and Value-Added Producer Grants can support feasibility studies as planning activities for eligible applicants and projects. Other programs do not permit grant funds to be spent on the study.
The Business & Industry Guaranteed Loan Program is USDA’s guarantee behind a commercial loan to an eligible rural business. The lender makes and services the loan; USDA guarantees an eligible portion of it.
No. USDA B&I is a loan guarantee program. The borrower repays the lender on commercial terms.
Eligibility depends on the rural area definition, the business and applicant structure, the use of proceeds and credit quality, among other program rules. USDA makes the eligibility determination on the lender’s application; no consultant or lender can guarantee it in advance.
For FY2026, USDA states that B&I applications requesting less than $5 million receive an 85% guarantee and applications of $5 million or more receive an 80% guarantee. Confirm the current percentages for any later fiscal year.
For a B&I guaranteed loan greater than $1 million to a new business, 7 CFR §5001.306 requires a feasibility study by an independent qualified consultant acceptable to USDA. The Agency may also require one on other transactions when the lender’s analysis, the borrower’s business plan or other project information does not adequately establish technical feasibility, market feasibility or economic viability.
Under Part 5001 it addresses economic, market, technical, financial and management feasibility, and Appendix A also contemplates an executive summary, a recommendation containing the consultant’s opinion, and the qualifications and prior experience of the author.
An independent qualified consultant — defined by USDA as an independent third party possessing the knowledge, expertise and experience to perform the specific task required. Where the study is mandatory under §5001.306, the consultant must also be acceptable to the Agency.
Start with relevant experience rather than price: USDA program knowledge, industry experience, independence, financial-modeling capability, an understanding of lender underwriting, the qualifications of the actual author, and the consultant’s willingness to support the study through lender and USDA review.
USDA lists the B&I program as open, with lender applications accepted on an ongoing basis during the federal fiscal year, October 1 through September 30. Unlike the competitive grant programs, it does not run on an application window.
Preparing a USDA B&I loan, rural business project or USDA-funded planning initiative? An independent feasibility study can evaluate market demand, technical requirements, management capability, financial viability and project risk before major financing decisions are finalized.
Choosing the correct feasibility consultant should start with relevant USDA and industry experience, independence and analytical capability — not simply the lowest fee.
Send the project type, location, approximate total project cost and financing program. You get back a written scope, a delivery date and a fixed fee — by email, normally within one business day, with no call required.
President, Wert-Berater, Inc. — independent feasibility study consultants since 1998. 3,969 feasibility studies completed across all 50 states and internationally, evaluating $41.2 billion in project value for SBA, USDA, EB-5, conventional, and institutional financing decisions. Fiduciary duty runs to the lender and agency in every engagement.
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