A B&I guarantee is granted on a file, not on a conversation. The lender assembles it, the Agency reviews it, and most delays come from the same few gaps: equity that is not documented, projections with nothing behind them, and a missing independent study. This page lists what the rule asks for, so a borrower can see what the lender will be asking them to produce.
7 CFR 5001.303 lists what a lender submits for a loan guarantee. The items that most often involve third parties are:
Applications for guarantees above $600,000 carry the fuller set at 7 CFR 5001.306(a); at or below $600,000 the Agency may process the request under the lighter route at paragraph (b) where it is satisfied with the lender’s underwriting.
7 CFR 5001.202 requires a credit evaluation built on the conventional credit factors — character, capacity, capital, collateral and conditions — documented rather than asserted. For projects involving construction where the lender wants the guarantee before completion, the rule reaches further: quarterly operational cash flow analysis from current statements through start-up or occupancy, a firm fixed-price construction contract with an independent general contractor with change-order terms specified, and evidence that the lender has vetted the contractor’s financial standing and past performance or otherwise mitigated the risk.
Those requirements exist because the guarantee is being asked to cover a business that does not yet operate. That is also why the independent feasibility study matters most on exactly these files.
| Who must guarantee | Agency-approved unsecured guarantees for the full term of the loan are required from owners, in an amount at least equal to their ownership interest. |
|---|---|
| Below 20 percent | Guarantees may be obtained from persons or entities owning less than a 20-percent interest, at the Agency’s discretion. |
| Exceptions | A lender may request an exception, documenting to the Agency’s satisfaction that collateral, equity and other factors support it. |
$600,000. Above it, the fuller application package applies. At or below it, a streamlined route is available.
$1,000,000. Above it, for a new business, a feasibility study by an independent qualified consultant acceptable to the Agency is required. Above it, where direct employment would increase by more than 50 employees, USDA must obtain U.S. Department of Labor concurrence.
The equity tests sit separately, at 7 CFR 5001.105(d), and are summarised on the B&I loan page. They are tested at closing, which is why documenting the source of the borrower’s contribution early avoids a late problem.
Wert-Berater prepares the independent feasibility study, market study, business plan or appraisal that the file needs, and can review a draft package for the gaps an agency reviewer will find. The firm does not package the loan, does not submit it, and is not compensated on whether it is approved. Lenders and CDCs that want analytical capacity rather than a report can look at outsourced OneRD underwriting.
Last reviewed September 2026. Requirements are quoted from the current text of 7 CFR part 5001.
We prepare the independent study, market analysis or appraisal the file needs. Fixed fee quoted in one business day.
Schedule a Qualification Zoom About B&I loansLegal disclosure. Wert-Berater, Inc. offices are mailing addresses only. Following the COVID-19 pandemic the firm has elected to work remotely; its office locations receive mail and are not staffed for visitors or in-person meetings. Headquarters mailing address: 1968 South Coast Hwy, Ste 2382, Laguna Beach, CA 92651.
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.