The U.S. Department of Agriculture (USDA) recently announced to provide up to $1 billion in loan guarantees to help farmers and rural businesses meet their working capital needs amid the COVID-19 pandemic.
The new program is patterned on the USDA’s existing Business and Industry program (B&I) but with a higher loan guarantee level.
Notably, loan guarantees assure lenders that the government will pay off a loan if the borrower cannot.
In addition to this, agricultural producers who aren’t eligible may receive funding under USDA Business & Industry (B&I) CARES Act Program provisions.
“Under the leadership of President Trump, USDA is committed to being a strong partner to rural businesses and agricultural producers and being a strong supporter of all aspects of the rural economy,” Secretary Perdue said.
“Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment,” Perdue added.
“Loans must be used as working capital to prevent, prepare for, or respond to the effects of the coronavirus pandemic,” USDA said on the homepage for the new program.
However, the USDA didn’t specify the maximum size for loans eligible for guarantees in the coronavirus program.