New rules for USDA local food enterprise loans

Access to capital is important for all small businesses, including the food and farm businesses that bring locally and regionally produced food into rural communities, schools, and markets. Fortunately, there is a federal loan guarantee program, the Business and Industry (B&I) Loan Guarantee Program, which specifically supports these types of local entrepreneurs.

Qualified projects can include on-farm businesses as well as commercial or cooperative enterprises, like the Hendersonville Community Co-op in North Carolina. The Hendersonville Co-op started as a buying club in the seventies, and later evolved into a 3,000 square foot retail space. The space served the community well for 13 years, but when the co-op needed to expand, they were able to use a B&I loan to make it happen.

“Programs like the B&I Loan Program support our work, so that we’re not feeling that the price point is always job number one,” said Gretchen Cummins, Outreach Coordinator for the cooperative. “If we make food available that is real, and if we can source it on a larger scale because of programs like B&I, we can put it on shelves and make it affordable, and we can bring in a larger portion of our local demographic, and we can bring in our community members who are on tight budgets or are socially disadvantaged.”

The U.S. Department of Agriculture (USDA) administers the B&I program through its rural development mission area. As a subset of the overall B&I program, the Local and Regional Food Enterprise program provides up to approximately $45 million each year in loan guarantees for food enterprise projects.

Read more at the National Sustainable Agriculture Coalition