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**B&I GUARANTEED LOAN PROGRAM**

**COMPARED TO**

**RURAL ENERGY FOR AMERICA PROGRAM (Guaranteed Loan and Grant)\
**

+------------+-------------------+------------------+-----------------+
|            | **B&I**           | **REAP Loan**    | **REAP Grant**  |
+------------+-------------------+------------------+-----------------+
| **LOAN     |                   |                  |                 |
| AMOUNTS**  |                   |                  |                 |
+------------+-------------------+------------------+-----------------+
| Minimum    | No minimum        | \$5,000          | \$2,500         |
|            |                   |                  | (system)        |
|            |                   |                  |                 |
|            |                   |                  | \$1,500         |
|            |                   |                  | (efficiency)    |
+------------+-------------------+------------------+-----------------+
| Maximum    | Maximum \$10      | \$25 million or  | \$500,000       |
|            | million with some | 75% of total     | (system)        |
|            | exceptions up to  | eligible project |                 |
|            | \$25 million and  | costs, whichever | \$250,000,      |
|            | up to \$40        | is less. (75%    | (efficiency)    |
|            | million on rural  | includes grant   |                 |
|            | cooperative       | dollars received | Or 25% of       |
|            | organizations     | under REAP       | eligible        |
|            | that process      | Combination      | project cost,   |
|            | value-added       | Program)         | which ever is   |
|            | agricultural      |                  | less            |
|            | commodities.      |                  |                 |
+------------+-------------------+------------------+-----------------+
| **ELIGIBLE | \* Business and   | \* Purchase and  | \* Purchase and |
| PURPOSES** | industrial        | installation of  | installation of |
|            | acquisitions      | a renewable      | a renewable     |
|            |                   | energy system or | energy system   |
|            | \* Purchase of    | energy           | or energy       |
|            | land, machinery   | efficiency       | efficiency      |
|            | and equipment     | improvement      | improvement     |
|            |                   | which includes:  | which includes: |
|            | \* Construction,  |                  |                 |
|            | enlargement or    | -   Post         | -   Post        |
|            | modernization     |     application  |     application |
|            |                   |     purchase and |     purchase    |
|            | \* Eligible fees  |     installation |     and         |
|            | and costs         |     of equipment |                 |
|            |                   |                  |    installation |
|            | \* Educational or | -   Post         |     of          |
|            | training          |     application  |     equipment   |
|            | facilities        |     construction |                 |
|            |                   |     or project   | -   Post        |
|            | \* Tourist        |     improvements |     application |
|            | facilities        |                  |                 |
|            |                   | -   Energy       |    construction |
|            | \* Hotels/motels  |     audits and   |     or project  |
|            |                   |     assessments  |                 |
|            | \* Pollution      |                  |    improvements |
|            | control or        | -   Permit and   |                 |
|            | abatement         |     license fees | -   Energy      |
|            |                   |                  |     audits and  |
|            | \* Recreation     | -   Professional |     assessments |
|            | facilities        |     service fees |                 |
|            |                   |                  | -   Permit and  |
|            | \* Working        | -   Feasibility  |     license     |
|            | capital           |     Study,       |     fees        |
|            |                   |     Business     |                 |
|            | \* Refinancing    |     Plan         | -               |
|            | when it is        |                  |    Professional |
|            | determined that   | -   Retrofitting |     service     |
|            | refinancing is    |                  |     fees        |
|            | necessary to      | -   Construction |                 |
|            | improve cash flow |     of a new     | -   Feasibility |
|            | and create new or |     energy       |     Study,      |
|            | save existing     |     efficient    |     Business    |
|            | jobs.             |     facility     |     Plan        |
|            |                   |     only when    |                 |
|            | \* Commercially   |     the facility | -               |
|            | available energy  |     is used for  |    Retrofitting |
|            | projects that     |     the same     |                 |
|            | produce biomass   |     purpose, is  | -               |
|            | fuel or biogas.   |                  |    Construction |
|            |                   |    approximately |     of a new    |
|            |                   |     the same     |     energy      |
|            |                   |     size, and    |                 |
|            |                   |     based on the | -   efficient   |
|            |                   |     energy audit |     facility    |
|            |                   |     will provide |     only when   |
|            |                   |     more energy  |     the         |
|            |                   |     savings than |     facility is |
|            |                   |     improving an |     used for    |
|            |                   |     existing     |     the same    |
|            |                   |     facility.    |     purpose, is |
|            |                   |                  |                 |
|            |                   | ```{=html}       |   approximately |
|            |                   | <!-- -->         |     the same    |
|            |                   | ```              |     size, and   |
|            |                   | -   Working      |     based on    |
|            |                   |     capital and  |     the energy  |
|            |                   |     land         |     audit will  |
|            |                   |     acquisition  |     provide     |
|            |                   |                  |     more energy |
|            |                   |                  |     savings     |
|            |                   |                  |     than        |
|            |                   |                  |     improving   |
|            |                   |                  |     an existing |
|            |                   |                  |     facility.   |
+------------+-------------------+------------------+-----------------+

  ------------- -------------------- ------------------ ------------------
                **B&I**              **REAP Loan**      **REAP Grant**

  ------------- -------------------- ------------------ ------------------

+------------+-------------------+------------------+-----------------+
|            |                   |                  | Applicants can  |
|            |                   |                  | also apply for  |
|            |                   |                  | funding for the |
|            |                   |                  | following       |
|            |                   |                  | activities:     |
|            |                   |                  |                 |
|            |                   |                  | \* Feasibility  |
|            |                   |                  | Study for a     |
|            |                   |                  | Renewable       |
|            |                   |                  | Energy System.  |
|            |                   |                  |                 |
|            |                   |                  | \*Certain       |
|            |                   |                  | organizations   |
|            |                   |                  | can apply for   |
|            |                   |                  | grant           |
|            |                   |                  | assistance to   |
|            |                   |                  | conduct Energy  |
|            |                   |                  | Audits and      |
|            |                   |                  | Renewable       |
|            |                   |                  | Energy          |
|            |                   |                  | Development     |
|            |                   |                  | Assistance for  |
|            |                   |                  | Agricultural    |
|            |                   |                  | Producers and   |
|            |                   |                  | Rural Small     |
|            |                   |                  | Businesses      |
+------------+-------------------+------------------+-----------------+
| **         | \* Relocate jobs  | \* Residential   | \* Working      |
| INELIGIBLE | or to expand a    | projects         | capital         |
| PURPOSES** | business where an |                  |                 |
|            | excess of supply  | \* Debt          | \* Land         |
|            | of the goods or   | refinancing      | acquisition     |
|            | services already  |                  |                 |
|            | exists            | \* Any line of   | \* Residential  |
|            |                   | credit           | projects        |
|            | \* Pay any        |                  |                 |
|            | distribution to   | \* Agricultural  | \* Debt         |
|            | an owner or       | tillage          | refinancing     |
|            |                   | equipment        |                 |
|            | beneficiary who   |                  | \* Any line of  |
|            | will continue in  | \* Used          | credit          |
|            | the               | equipment        |                 |
|            |                   |                  | \* Agricultural |
|            | business          | *(remanufactured | tillage         |
|            |                   | is OK)*          | equipment       |
|            | \* Transfer the   |                  |                 |
|            | ownership of a    | \* Vehicles      | \* Used         |
|            | business unless   |                  | equipment       |
|            | the transfer is   | \*Application    |                 |
|            | necessary to keep | preparation fee  | *               |
|            | the business from |                  | (remanufactured |
|            | closing           |                  | is OK)*         |
|            |                   |                  |                 |
|            | \* Finance        |                  | \* Vehicles     |
|            | charitable,       |                  |                 |
|            | religious or      |                  | \*Application   |
|            | fraternal         |                  | preparation fee |
|            |                   |                  |                 |
|            | organizations     |                  |                 |
|            |                   |                  |                 |
|            | \* Finance        |                  |                 |
|            | agricultural      |                  |                 |
|            | production with   |                  |                 |
|            | the               |                  |                 |
|            |                   |                  |                 |
|            | exception of      |                  |                 |
|            | specialized crops |                  |                 |
|            |                   |                  |                 |
|            | \* Finance golf   |                  |                 |
|            | courses,          |                  |                 |
|            | racetracks and    |                  |                 |
|            |                   |                  |                 |
|            | gambling          |                  |                 |
|            | facilities        |                  |                 |
|            |                   |                  |                 |
|            | \* Any line of    |                  |                 |
|            | credit or         |                  |                 |
|            | revolving loan    |                  |                 |
+------------+-------------------+------------------+-----------------+
| **TERMS**  | 30 years for real | 30 years for     | NA              |
|            | estate            | real estate      |                 |
|            |                   |                  |                 |
|            | 15 years or       | 20 years or      |                 |
|            | useful life of    | useful life of   |                 |
|            | equipment         | equipment        |                 |
|            |                   |                  |                 |
|            | 7 years for       | 7 years for      |                 |
|            | working capital   | working capital  |                 |
+------------+-------------------+------------------+-----------------+

+------------------+-------------------------+------------------------+
|                  | \* 80% maximum          | \* 85% maximum         |
|                  | guarantee on loans up   | guarantee on loans     |
|                  | to and including \$5    | \$600,000 or less      |
|                  | million                 |                        |
|                  |                         | \* 80% maximum         |
|                  | \* 70% maximum          | guarantee on loans     |
|                  | guarantee on loans      | more than \$600,000    |
|                  | greater than \$5        | but less than \$5      |
|                  | million up to and       | million                |
|                  | including \$10 million  |                        |
|                  |                         | \* 70% maximum         |
|                  | \* 60% maximum          | guarantee on loans     |
|                  | guarantee loans greater | greater than \$5       |
|                  | than \$10 million       | million up to and      |
|                  |                         | including \$10 million |
|                  | A limited amount of     |                        |
|                  | guarantee authority for | \* 60% maximum         |
|                  | 90 percent guarantees   | guarantee loans        |
|                  | on loans of\            | greater than \$10      |
|                  | \$10 million and less   | million                |
|                  | is available annually   |                        |
|                  | for high priority       |                        |
|                  | projects.               |                        |
+------------------+-------------------------+------------------------+
| **EQUITY**       | **Tangible balance      | **Cash equity**        |
|                  | sheet equity**          | requirement:           |
|                  | requirement:            |                        |
|                  |                         | \* 15% for loans       |
|                  | \* 10% for existing     | \$600,000 or less      |
|                  | business                |                        |
|                  |                         | \* 25% for loans       |
|                  | \* 20% for startup      | greater than \$600,000 |
|                  |                         |                        |
|                  | \* 25-40% for energy    | May use market value   |
|                  | projects                | of real estate equity  |
|                  |                         | pledged as collateral. |
|                  | Determined from         |                        |
|                  | financial statements    |                        |
|                  | prepared in accordance  |                        |
|                  | with Generally Accepted |                        |
|                  | Accounting Principles   |                        |
+------------------+-------------------------+------------------------+
| **COLLATERAL**   | Real estate -- Lender's | Real estate - --       |
|                  | typical discount for    | Lender's typical       |
|                  | this collateral.        | discount for this      |
|                  | Generally around 80% of | collateral. Generally  |
|                  | appraisal value.        | around 80% of          |
|                  |                         | appraisal value        |
|                  | M&E -- Lender's typical |                        |
|                  | discount for this       | M&E -- Lender's        |
|                  | collateral. Generally   | typical discount for   |
|                  | around 70% of appraised | this collateral.       |
|                  | value                   | Generally around 70%   |
|                  |                         | of appraised value     |
|                  | AR/Inventory --         |                        |
|                  | Lender's typical        | AR/Inventory --        |
|                  | discount for this       | Lender's typical       |
|                  | collateral. Generally   | discount for this      |
|                  | around 60% of book      | collateral. Generally  |
|                  | value.                  | around 60% of book     |
|                  |                         | value.                 |
+------------------+-------------------------+------------------------+
| **FEES**         | **Guarantee fee:** 2%   | **Guarantee fee**: 1%  |
|                  | of the guaranteed       | of the guaranteed      |
|                  | portion of the loan     | portion of the loan    |
|                  | payable to USDA Rural   | payable to USDA Rural  |
|                  | Development when the    | Development when the   |
|                  | guarantee is issued.    | guarantee is issued.   |
|                  |                         |                        |
|                  | \-\-\-\-\-\-\-\-\-      | \-\                    |
|                  | \-\-\-\-\-\-\-\-\-\-\-\ | -\-\-\-\-\-\-\-\-\-\-\ |
|                  | -\-\-\-\-\-\-\-\-\-\-\- | -\-\-\-\-\-\-\-\-\-\-\ |
|                  | \-\-\-\-\-\-\-\-\-\-\-\ | -\-\-\-\-\-\-\-\-\-\-\ |
|                  | -\-\-\-\-\-\--***Annual | -\-\-\-\-\-\-\-\-\-\-- |
|                  | renewal fee***: *0.25%* |                        |
|                  |                         | ***Annual renewal      |
|                  | *(Based on the          | fee**: 0.25%*          |
|                  | outstanding balance of  |                        |
|                  | the guaranteed portion  | *(Based on the         |
|                  | of the loan as of       | outstanding balance of |
|                  | December 31^st^.)*      | the guaranteed portion |
|                  |                         | of the loan as of      |
|                  |                         | December 31^st^.)*     |
+------------------+-------------------------+------------------------+
| **ELIGIBLE       | Any area other than a   | Any area other than a  |
| AREAS**          | city or town that has a | city or town that has  |
|                  | population of greater   | a population of        |
|                  | than 50,000 inhabitants | greater than 50,000    |
|                  | and the urbanized area  | inhabitants and the    |
|                  | contiguous and adjacent | urbanized area         |
|                  | to such city or town as | contiguous and         |
|                  | defined by the latest   | adjacent to such city  |
|                  | decennial census of the | or town as defined by  |
|                  | United States.          | the latest decennial   |
|                  |                         | census of the United   |
|                  |                         | States.                |
+------------------+-------------------------+------------------------+
| **ELIGIBLE       | Federal or State        | Federal or State       |
| LENDERS**        | chartered bank, Farm    | chartered bank, Farm   |
|                  | Credit Bank, or other   | Credit Bank, or other  |
|                  | Farm Credit             | Farm Credit            |
|                  | institutions with       | institutions with      |
|                  | direct lending          | direct lending         |
|                  | authority, Bank for     | authority, Bank for    |
|                  | Cooperatives, and       | Cooperatives, and      |
|                  | Savings and Loan        | Savings and Loan       |
|                  | Association, Credit     | Association.           |
|                  | Unions, insurance       |                        |
|                  | companies, National     |                        |
|                  | Rural Utilities         |                        |
|                  | Cooperative Finance     |                        |
|                  | Corporation, and        |                        |
|                  | mortgage companies that |                        |
|                  | are part of a           |                        |
|                  | bank-holding company.   |                        |
+------------------+-------------------------+------------------------+
| **APPRAISALS**   | **Real estate**:        | Specialized appraisers |
|                  | Prepared by State       | required.              |
|                  | Certified General       |                        |
|                  | Appraiser.              | Loans of \$600,000 or  |
|                  |                         | more require a         |
|                  | \* In compliance with   | complete               |
|                  | Financial Institutions  | self-contained         |
|                  | Reform, Recovery, and   | appraisal.             |
|                  | Enforcement Act         |                        |
|                  | (FIRREA) of 1989 and    | Transaction Screen     |
|                  | Standards 1 and 2 of    | Questionnaire for any  |
|                  | the Uniform Standards   | undeveloped sites and  |
|                  | of Professional         | a Phase I for existing |
|                  |                         | business sites.        |
|                  | Appraisal Practices     |                        |
|                  | (USPAP)                 | Loans less than        |
|                  |                         | \$600,000 same         |
|                  | \* Less than one (1)    | requirements as B&I.   |
|                  | year old.               |                        |
|                  |                         | Appraisal Practices    |
|                  | \* Identify the lender  | (USPAP)                |
|                  | and USDA Rural          |                        |
|                  | Development as the      | \* Less than one (1)   |
|                  | intended users.         | year old.              |
|                  |                         |                        |
|                  | Copy of environmental   | \* Identify the lender |
|                  | site assessment (Phase  | and USDA Rural         |
|                  | I or Phase II) *(if     | Development as the     |
|                  | applicable)*            | intended users.        |
|                  |                         |                        |
|                  | **Chattels**: In        | Copy of environmental  |
|                  | accordance with normal  | site assessment (Phase |
|                  | banking practices and   | I or Phase II) *(if    |
|                  | generally accepted      | applicable)*           |
|                  | methods of determining  |                        |
|                  | value.                  |                        |
+------------------+-------------------------+------------------------+
| **ISSUANCE OF    | Commercially available  | All planned property   |
| LOAN NOTE        | energy projects that    | acquisitions and       |
| GUARANTEE**      | produce biomass fuel or | development have been  |
|                  | biogas as an output     | performing at a steady |
|                  | must have completed two | state operating level  |
|                  | operating cycles at     | in accordance with the |
|                  | design performance      | technical              |
|                  | levels submitted to the | requirements, plans,   |
|                  | Agency.                 | and specifications,    |
|                  |                         | conforms with          |
|                  |                         | applicable Federal,    |
|                  |                         | State, and local       |
|                  |                         | codes, and costs have  |
|                  |                         | not exceeded the       |
|                  |                         | amount approved by the |
|                  |                         | lender and the Agency. |
+------------------+-------------------------+------------------------+