FEATURES OF THE B&I –
ARRA Guaranteed Loan Program
General Guidelines
- B&I-ARRA is an enhanced B&I program – Except as outlined below, the program works exactly like the regular B&I program. It is designed to help lenders extend commercial loans to rural businesses of all sizes and thereby overcome the perceived “credit crunch.”
Enhancements
- Ample
Funding –
- Reduced 1% guarantee fee – the standard 2% B&I guarantee fee has been cut in half to 1%. For example on a $3,000,000 loan receiving an 80% guarantee the fee would be $24,000. ($3,000,000 * 80% * 1%) vs the regular program where the fee would have been $48,000.
- No Annual Renewal Fee – The standard .25% annual renewal fee is eliminated.
- 90% guarantee for “high priority loans”. Loans that support Quality Jobs in Distressed/Underserved Areas can qualify for 90% guarantees on loans up to $10 million. By contrast, with the standard B&I program loans up to $5 million can qualify for up to an 80% guarantee and 70% on larger loans up to $10 million.
What are “High Priority Loans?” They are loans that score a minimum of 55 points under the B&I scoring system. Normally, a loan can score 55 points if it has these 2 features:
- Quality Jobs. The business being financed pays an average wage rate of at least $9.07 per hour (more than 125% of the federal minimum wage).
- Distressed Community. The business will be in an area experiencing any of the following:
- High Unemployment – More than 125% of the national unemployment rate.
- Underserved area or Underrepresented Group – Either a business located in an area that has historically not benefited from B&I assistance or a minority-owned or woman-owned business.
- Out-migration – Population loss each decade for the last 40 years.
- Persistent Poverty – over 20% poverty for the past 30 years.
With
Restrictions
Ineligible projects for B&I-ARRA funds.
- Aquariums, museums, zoos
- Convenience Stores (unless the store provides “Quality Jobs” as defined above or sells or will sell E85 fuel upon completion of the project.)
- Hotels, motels, or other facilities with pools or water parks
- Golf courses, casinos, and other gambling establishments (which are ineligible under regular B&I as well)
Construction Projects (>$2,000)
- B&I can fully support fully-amortizing loans for construction projections. However, when more than $2,000 will be spent for construction, alteration or repair (including painting or decorating), Davis-Bacon Prevailing Wage Requirements apply.
Public Works Projects
- B&I ARRA can support public body projects. However, for such projects, “Buy American” requirements apply to all purchased materials (iron, steel, etc) and equipment.
Vehicles
- If they are to be financed only American vehicles can be purchased.
Please get in touch with a local B&I Specialist to help you with your Guarantee Loan Projects. We are here to assist you.
Carol Webb Specialist East Lansing 517-324-5219 carol.webb@mi.usda.gov
Rick Vanderbeek Specialist East Lansing 517-324-5218 rick.vanderbeek@mi.usda.gov
Alan Anderson Specialist Traverse City 231-941-0951 x128 alan.anderson@mi.usda.gov
Lisa Epple Specialist Watervliet 269-463-8030 lisa.epple@mi.usda.gov
Jackie Morgan Specialist Gladwin 989-426-2750 jackie.morgan@mi.usda.gov
Paula Gromak Specialist Caro 989-673-8173 x120 paula.gromak@mi.usda.gov
Lori Krause Specialist Gladstone 906-428-1060 x112 lori.krause@mi.usda.gov
USDA is an equal opportunity
provider, employer and lender. To file a
complaint of discrimination, write USDA, Director, Office of Civil Rights 1400
Independence Ave., SW, Washington, D.C. 20250-9410, or call (800) 795-3272
(voice) or (202) 720-6382 (TDD)