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Intermediary Relending Loan Program (IRP)

Offering revolving loan funds for rural small business and community development projects

Program Basics
The Intermediary Relending Program (IRP) provides direct loans at 1 percent interest to intermediaries for establishing revolving loan funds for small businesses and community development projects in rural areas.Intermediaries are nonprofit organizations or public agencies that relend money through loan pools to ultimate recipients, including businesses, individuals and others such as Indian groups or Cooperative Ultimate.Final recipients of loans from IRP revolving loan funds involved in agricultural production are not eligible. However, businesses processing, packaging, and marketing agricultural products will be considered.

Project Examples

Application and Financial Information
Intermediaries with experience and expertise in running revolving loan funds apply to the USDA state offices of Rural Development. Applications are considered in a quarterly national competition.

An intermediary may borrow up to $2 million under its first financing and up to $1 million at a time thereafter. Total aggregate debt is capped at $15 million. In recent years, loans to intermediaries have been capped at $750,000. Ultimate recipients may borrow up to $250,000.

Loans to intermediaries average $812,000. Intermediaries receive a 30-year loan with a fixed annual interest rate of 1 percent. The funding available for fiscal year 2002 was $38 million.

Intermediaries develop their own application procedures for ultimate recipients.

Factors considered in judging applications from intermediaries include:

Eligibility, Uses, and Restrictions
The following entities are generally eligible to apply for loans from intermediary lenders provided they owe no delinquent debt to the Federal Government:

Nonprofit corporations, public agencies, Native American tribes, and cooperatives are eligible to receive IRP funds as intermediaries. Intermediaries must have adequate legal authority and a proven record of successfully assisting rural businesses and industries.

Both intermediaries and ultimate recipients must be unable to obtain the loan at reasonable rates and terms through commercial credit or other federal, state, or local programs.

Final recipients of loans from IRP revolving loan funds involved in agricultural production are not eligible. However, businesses processing packaging and marketing agricultural products will be considered.Intermediaries may not use IRP funds to finance more than 75 percent of the cost of an ultimate recipient's project or for a loan of more than $250,000 to one ultimate recipient.

Website
www.rurdev.usda.gov/rbs/busp/irp.htm

Contact
For a list of intermediaries and their service areas, more detailed information, or an application, contact your USDA state or district office of Rural Development.: www.rurdev.usda.gov/recd_map.html

Last Updated January 26, 2010

Please note: Building Sustainable Farms, Ranches and Communities is also available for download in PDF format.

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