Loan Guarantee program is a lender-driven program that provides a loan guarantee to the bank or other approved lender to finance private businesses located in rural areas of 50,000 population or less. Most traditional lenders are eligible. The guaranteed portion of the loan does not count against a financial institution s lending limit. All or part of the guaranteed portion of the loan may be sold on the secondary market. Business loan guarantee purposes include, among other items, construction, acquisition, working capital, equipment purchase, startup costs, expansion costs, and, in some cases, debt refinancing.
Most traditional lenders are eligible.
Applicants for these loans may be any legal entity, including individuals, public and private organizations, and federally recognized Indian tribal groups. The business must be located in rural areas of 50,000 population or less. Interest rates are negotiated between the lender and business. They may be fixed or variable. The lender will ensure collateral is sufficient.