The Business & Industry programme is USDA’s general-purpose guarantee for rural commercial and industrial projects. A commercial lender makes the loan and applies for the guarantee; the borrower never applies to USDA directly. Since 2020 the programme has been processed under the OneRD rule at 7 CFR part 5001, which is where the eligibility, equity and feasibility requirements below come from.
What it is: a loan made by a commercial lender and guaranteed in part by USDA Rural Development under 7 CFR part 5001.
Who applies: the lender. The borrower works with the lender.
Where it has to be: a rural area as defined in 7 CFR 5001.3, with priority points for projects in an unincorporated area or a city of fewer than 25,000 people.
Capital test: existing businesses generally need 10 percent balance sheet equity; new businesses 20 percent, or 25 percent where the guarantee is requested before construction is complete (7 CFR 5001.105(d)).
Feasibility: required from an independent qualified consultant for guaranteed loans over $1,000,000 to a new business (7 CFR 5001.306(a)(3)(i)).
7 CFR 5001.105(d) sets a capital or equity test that must be met at loan closing. A borrower satisfies it in one of several ways — balance sheet equity, investment into the project, or owner-contributed capital measured against fixed assets — and the threshold depends on what kind of borrower it is.
| Borrower | Balance sheet equity | Or investment as a share of eligible project cost |
|---|---|---|
| Existing business | At least 10 percent, or a maximum debt-to-equity ratio of 9 to 1 | At least 10 percent |
| New business with adequate sales contracts | At least 10 percent, or 9 to 1 | At least 10 percent |
| New business, guarantee requested before construction is complete | At least 25 percent, or 3 to 1 | At least 25 percent |
| All other new businesses | At least 20 percent, or 4 to 1 | At least 25 percent |
Subordinated debt counts toward equity when it is subject to a standstill agreement for the life of the loan, and grants count toward the project-investment measure. The Agency may raise the requirement for a higher-risk loan, and may reduce it for an existing business where guarantees are obtained under 7 CFR 5001.204 and the pro forma statements support it.
The trigger is in the application rule, not the eligibility rule. Under 7 CFR 5001.306:
“Independent qualified consultant” is the operative phrase. A study written by the borrower, by an affiliate, or by the lender does not meet it, and neither does a market summary that restates the sponsor’s projections. What the study has to contain is set out in our B&I feasibility study guide.
7 CFR 5001.105 carries specific provisions for cooperatives. Guaranteed loans to eligible cooperatives may be made in principal amounts up to $40 million where the project is in a rural area and the facility provides for value-added processing of agricultural commodities, subject to a cap on how much of the fiscal year’s funds may go to loans above $25 million. Loans to eligible cooperatives may also be made in non-rural areas where the primary purpose is a value-added processing facility serving producers within 80 miles, the primary benefit is employment for rural residents, the loan does not exceed $25 million, and the total guaranteed under that paragraph stays within 10 percent of the funds available for the year.
Projects at that scale are the ones where the independent analysis carries the most weight: the agency is being asked to stand behind a facility whose throughput, supply agreements and offtake pricing determine whether the debt is serviceable.
Demand for the output or service in the defined trade area, competitors and their capacity, the pricing the projections assume, and the evidence behind the capture rate.
That the site, the process and the equipment can produce what the projections assume, at the cost and throughput assumed, on the schedule assumed.
Projections tied to the market and technical findings, with debt service coverage tested against downside cases rather than a single base case.
Whether the people running the business have done this before, and what the plan is where they have not.
Last reviewed September 2026. Figures are quoted from the current text of 7 CFR part 5001.
Fixed fee quoted in one business day; delivery in 10–15 business days. Independent analysis only — Wert-Berater does not arrange, broker or place capital.
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Wert-Berater, Inc. is an independent provider of feasibility studies and other related services. The firm does not provide financing or equity investment advice, and does not arrange, broker, or place debt or equity capital of any kind.
All appraisal assignments are performed by Bruce E. Jones, MAI, ASA-GC, BCA, CMEA, a member of the Appraisal Institute since 2006, a staff member of Wert-Berater, Inc. and owner of Special Purpose Realty Valuation.