Rural Economic Development Loans and Grants (REDLG)

Providing zero-interest loans and grants to rural electric and telephone utilities to promote economic development and job creation

The Rural Economic Development Loans and Grants (REDLG) program makes direct zero-interest loans and grants to Rural Utilities Service (RUS) electric and telecommunication utilities that use the funds to provide financing for business and community development projects. Zero-interest loans are provided to finance a broad array of projects, including for-profit businesses.

Grants are provided to the RUS utility to establish a revolving loan fund to finance such purposes as community development assistance, education and training for economic development, medical care, telecommunications for education, job training or medical services, business incubators and technical assistance. Program funds can be used for value-added projects.

Project Example

A $450,000 zero-interest loan was made to an electric utility in Iowa to pass through to a startup value-added pork processing facility in Keokuk County , IA. The facility will cook and smoke pork products and package them for targeted ethnic markets.

Application and Financial Information
The USDA state offices of Rural Development generally are delegated loan approval authority on a case-by-case basis. Application reviews and advice are available through state offices.

Maximum awards are determined annually. For FY 2003, the maximum loan was $450,000 and the maximum grant was $200,000. Maturity for loans is a maximum of 10 years.

Applications are scored on job creation potential, sustainability of projects, suitability to the area, diversification of employment in the area, amount of supplemental funds, relative income, and employment levels.

The funding level for FY 2003 for loans and grants was $15 million and $4 million, respectively. Estimated funding for FY 2004 for loans and grants is $15 million and $4 million, respectively.

Eligibility, Uses, and Restrictions
Only RUS electric and telecommunication utilities are eligible. Loans are provided to finance a broad array of projects, including for-profit businesses.

Grants are provided to establish revolving loan funds to finance purposes such as community development assistance, education and training for economic development, medical care, telecommunications for education, job training or medical services, business incubators, and technical assistance.

Contact
The 47 state offices for USDA's Rural Development Program (formerly the Farmers Home Administration) deliver the REDLG program (along with other business and community programs). For more information and applications, contact your state USDA Rural Development office or any Rural Development field office. Applications are not available through the national program office, but inquiries are welcome.

Diane M. Berger, Senior Loan Specialist
National Program Office
USDA, Rural Business-Cooperative Service
14th and Independence Ave, SW, STOP 3225
Washington, DC 20250
Phone: (202) 720-1400; Fax: (202) 720-2213
E-mail: diane.berger@usda.gov

Internet
www.rurdev.usda.gov/ga/tredleg.htm

Last Updated March 22, 2006