Rural Business Enterprise Grants

To facilitate the development of small and emerging private business, industry, and related employment for improving the economy in rural communities.

Related Programs

Examples of Funded Projects

(1) a $25,000 grant was made for business development in an Empowerment Zone; (2) a $500,000 grant was made to establish a revolving loan fund; and (3) a $200,000 grant was made for construction of a manufacturing building.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.

Office - Consult your telephone directory for RD local office number.

If no listing, get in touch with appropriate Rural Development State Office listed in Appendix IV of the Catalog.

Program Accomplishments

In fiscal year 2007, 572 grants were made. It is anticipated that in fiscal year 2008, the level of activity will be approximately the same. The program is listed to go to Department of Commerce in fiscal year 2009.

Uses and Use Restrictions

Rural business enterprise grant (RBEG) funds may be used to create, expand or operate rural distance learning networks or programs that provide educational or job training instruction related to potential employment or job advancement to adult students; develop, construct or acquisition land, buildings, plants, equipment, access streets and roads, parking areas, utility extensions, necessary water supply and waste disposal facilities; refinancing; services and fees; and to establish a revolving loan fund.

Television demonstration grant (TDG) funds may be used for television programming to demonstrate the effectiveness of providing information on agriculture and other issues of importance to farmers and other rural residents.

All uses must assist a small and emerging private business enterprise except for the TDG Program.

Eligibility Requirements

Applicant Eligibility

Applicants eligible for RBE grants are public bodies and nonprofit corporations serving rural areas such as States, counties, cities, townships, and incorporated towns and villages, boroughs, authorities, districts and Indian tribes on Federal and State reservations which will serve rural areas.

Applicants eligible for TD grants are statewide, private, nonprofit, public television systems whose coverage is predominantly rural.

Rural area for this program is defined as a city, town, or unincorporated area that has a population of 50,000 inhabitants or less, other than an urbanized area immediately adjacent to a city, town, or unincorporated area that has a population in excess of 50,000 inhabitants.

Beneficiary Eligibility

A small and emerging private business enterprise which will employ 50 or less new employees and has less than $1.0 million in projected gross revenue. Public bodies, private non- profit corporations, and Federally recognized Indian tribes receive the grant to assist a business. Grants are not made directly to the business.


Evidence of legal capacity, economic feasibility and financial responsibility relative to the activity for which assistance is requested.

Aplication and Award Process

Preapplication Coordination

The standard application forms as furnished by the Federal agency and required by OMB Circular Nos.

A-110 and A-102 must be used for this program.

An environmental assessment is required for this program.

This program is eligible for coverage under E.O.

12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.

Application Procedures

Preapplication Form SF-424 is filed at the Rural Development local office. The standard application forms as furnished by the Federal agency and required by OMB Circular Nos. A-110 and A-102 must be used for this program.

Award Procedures

After the preapplication has been reviewed by the RD local office, it is forwarded to the RD State Office for review and processing instructions. Following approval by the State Office, funds are made available to the local office for final delivery. Notification of awards must be made to the designated State Central Information Reception Agency.




Consolidated Farm and Rural Development Act, as amended, Section 310B, Public Law 92-419, 7 U.S.C. 1989, Public Law 101- 624, Public Law 102-142, 7 U.S.C. 1932.

Range of Approval/Disapproval Time

30 to 90 days.


If an application is rejected, the reasons for rejection are fully stated. Applicant may request a review of this decision from the next higher management level of Rural Business-Cooperative Service.



Assistance Considerations

Formula and Matching Requirements

Funds are allocated to States based on rural population and percent of nonmetropolitan per capita income. On occasion, the allocation to States may not be practical due to funding or administrative constraints. In these cases, funds will be controlled by the National Office.

Length and Time Phasing of Assistance


Post Assistance Requirements


Periodic reports are made to RD.


Periodic audits should be made as part of the recipient's systems of financial management and internal control to meet terms and conditions of grants and other agreements. In accordance with the provisions of OMB Circular No. A-133, "Audits of States, Local Governments, and Nonprofit Organizations", State, local governments or Nonprofit Organizations that expend Federal financial assistance of $500,000 or more within the fiscal year shall have an audit made for that year.


The grantee shall maintain adequate records and accounts to assure that grant funds are used for authorized purposes.

Financial Information

Account Identification



FY 07 $41,925,672; FY 08 $44,223,026; and FY 09 est 38,727,000. Program is still aniticpated to go to the Department of Commerce but is continued to be funded.

Range and Average of Financial Assistance

$25,000 to $500,000. Average: $96,668.

Regulations, Guidelines, and Literature

7 CFR 1942, Subpart G.

Information Contacts

Regional or Local Office

Consult your telephone directory for RD local office number. If no listing, get in touch with appropriate Rural Development State Office listed in Appendix IV of the Catalog.

Headquarters Office

Director, Specialty Lenders Division, Rural Business-Cooperative Service, Department of Agriculture, Washington, DC 20250-3222. Telephone: (202) 720-1400. Use the same number for FTS.

Criteria for Selecting Proposals

Projects selected for funding should, as much as practical, adhere to the following priorities: (1) Projects which will be located in communities having a large portion of their population with low incomes; (2) projects which will save existing jobs; (3) projects which will create jobs; and (4) projects located in areas with high unemployment rate.

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