Equity of at least 20 percent is required for new businesses. Rural Development makes the determination as to what constitutes a rural area and gives priority to applications in towns of 25,000 and fewer people. The program focuses on projects in areas of high unemployment, projects requiring a low amount of investment per job created or saved, and projects that will employ members of displaced farm families. The purpose of the program is to finance business facilities and community development projects in rural areas with population of 25,000 or fewer. This is achieved through loans made by Rural Development to intermediaries.
Intermediaries then relend funds to ultimate recipients.
Loans must be for the establishment of new businesses, creation of employment opportunities, saving of existing jobs, or community development employment projects. All of the IRP funds received by an intermediary must then be loaned to ultimate recipients with the term of loans set by the intermediary. The interest rate is negotiated by the intermediary and the ultimate recipient.