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.
Uses and Use Restrictions
USDA licenses newly formed for-profit entities as Rural Business Investment Company's (RBIC)s and provides financial assistance in the form of debenture guarantees to such RBICs to fund their rural area investment activities.
Recipients use funds from the guaranteed debentures to make equity capital investments mostly in smaller enterprises located primarily in rural areas.
Additionally, USDA awards Operational Assistance grants to RBICs for the recipient to provide operational and technical assistance to the enterprises in which the RBIC invests.
Debentures issued by the RBIC and guaranteed by USDA are for a term not to exceed 10 years.
An applicant is eligible to apply for an RBIC license if it meets the criteria in Subpart C of 7 CFR part 4290, which include but are not limited to: (1) the company is a newly formed for-profit entity or a newly formed for-profit subsidiary of such an entity; (2) the company has a qualified management team with experience in community development financing or relevant venture capital financing; and (3) the company will invest in enterprises that will create wealth and job opportunities in rural areas, with an emphasis on smaller enterprises.
Individual businesses or enterprises must satisfy established criteria, including but not limited to being: (A) a public, private, or cooperative for-profit or nonprofit organization; (B) a for-profit or nonprofit business controlled by an Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group; or (C) any other person or entity; that primarily operates in a rural area, as determined by the Secretary.
Evidence of legal capacity, economic feasibility and financial responsibility relative to the activity for which assistance is requested. This program is excluded from coverage under OMB Circular No. A-87.
Aplication and Award Process
This program is excluded from coverage under E.O.
Applicants may submit applications only after USDA publishes a Notice of Funds Availability (NOFA) in the Federal Register and invites applications. Applicants must submit applications by the deadline specified in the NOFA. Application information and associated forms are available from the SBA Investment Division.
Applicants for RBIC designation will be selected for approval as an RBIC. Selected applicants then will have a certain period of time, specified by USDA but no more than 2 years, to raise its private capital. Those selected applicants that raise such resources by the applicable deadline and that meet other conditions established by USDA will receive a license to operate as an RBIC, which will include an operational assistance grant and a commitment of leverage in the form of debenture guarantees.
Application deadlines will be set forth in a NOFA published in the Federal Register.
The Consolidated Farm and Rural Development Act, as amended, Subtitle H, 7 U.S.C. 2009cc et seq.
Range of Approval/Disapproval Time
SBA, on behalf of USDA, may take an average of 120 days to consider and approve/disapprove applications.
Applicant(s) have the right to request review by USDA's National Appeals Division, per 7 CFR 4290.1940(i).
Formula and Matching Requirements
Applicants for a RBIC license must raise a minimum amount of private equity capital and must obtain debenture leverage (in the amount of 200 percent of its private capital) through the RBIP, to fund their investment activities. Under the current NOFA, USDA requires $10,000,000 in private equity capital and will not be granting exceptions to this requirement, pursuant to 7 CFR 4290.210(b), under this funding opportunity.
Length and Time Phasing of Assistance
RBICs must issue any Debentures subject to USDA guarantee within five years of licensing as an RBIC. Project grant funds will be available for a time period not to exceed 5 years after award.
Post Assistance Requirements
SBA, on behalf of USDA, will request financial information including, but not limited to, financial statements, economic impact and community development information, and portfolio financing reports and valuations.
SBA, on behalf of USDA, will require an annual financial report performed by an independent public accountant and periodic examinations performed by SBA examiners or an examiner contracted by SBA.
Appropriate records as needed for requirements of 111 and 112.
FY 07 est not available; FY 08 est not available; and FY 09 est not reported. Note: RBIP Program included in Deficit Reduction Act of 2006, which cancelled all remaining unobligated funds as of September 30, 2006. No new funding has subsequently been made available.
Range and Average of Financial Assistance
$20,000,000 Debentures and $1,000,000 Grants.
Regulations, Guidelines, and Literature
7 CFR Part 4290. Further, Section 384Q of the statute required the Secretary to enter into an interagency agreement under Section 1535 of Title 31, United States Code, with another Federal agency that has considerable expertise in operating a program under which capital is provided for equity investments in private sector companies. USDA and the Small Business Administration (SBA) signed an Economy Act Agreement on October 31, 2003. The Agreement authorizes SBA to provide the day-to-day management and operation of the RBIP, including administrative and all data management, licensing and regulatory compliance functions.
Regional or Local Office
Consult your local telephone directory for the appropriate Rural Development State Office listed in Appendix IV of the Catalog.
Administrator, Rural Business-Cooperative Service, Department of Agriculture, Washington, DC 20250-3201. Telephone: (202) 690-4730, Fax: (202) 690-4737.
Criteria for Selecting Proposals
Equity venture capital finance experience, community development finance experience, and ability to raise equity capital.
During the Global Green Growth Forum in Copenhagen, World Resources Institute (WRI) announced the launch of a process to develop a global standard for measuring food loss and waste.