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Are you looking to start a small business? It may be one of the most rewarding opportunities of your life to own your own business. But many people struggle with finding business capital.

There are many different options available for funding your business. You can choose from conventional bank loans, angel investors, or money from family and friends. But did you know that the USDA gives out loans specifically to help people launch their businesses?

Let’s learn more about USDA loans and how they can help build your small business.

What Is a USDA Business Loan?

The USDA offers a subsidized loan program that can help rural or small businesses get up and running. You can apply for a USDA loan from a participating institution and the US federal government will back that loan.

The USDA loan you want to use for your business is the USDA Business and Industry Loan, which can go up to $25 million but is typically much smaller. It is considered a long-term loan.

How to Qualify for a USDA Loan for Small Business

It’s important to note that you can qualify for this loan only if you are located in a rural area. The USDA usually considers a rural area to have a population of 50,000 people or less, but most non-urban areas in South Carolina qualify.

You may also qualify for this loan if your business is headquartered in a large city but you are looking to conduct a part of your business or start a new sector of your company in a qualified rural area.

You must also be a US citizen or permanent resident to qualify for this loan.

Find out if you are in a qualifying area here.

How to Apply for a USDA Loan

The process for applying for a USDA loan can be a bit more lengthy than applying for a conventional loan from a bank. There is a large amount of paperwork but the benefits outweigh the barrier to entry.

The first step is to contact the USDA office in your state. A staff member will consult you on whether or not your business goals will match with one of the USDA loan programs.

If so, you can start the application process. As part of your application, you will need to submit very detailed information. You will need items like your overall business plan, credit reports, cash flow sheets, profit and loss statements, and potentially a real estate appraisal.

How to Use USDA Loans to Fund Your Small Business

Once you are approved for your USDA loans, there is a variety of ways you may use the funds. This versatility is what makes a USDA very attractive to business owners. You may use it toward business development, debt refinancing, equipment, machinery, inventory, a business acquisition, and more.

We Can Help You Finance Your Business

A USDA loan is just one of the many options that are available to fund your business. Regardless of the type of funding you choose, we can help you make the right choice for your specific business needs.

Contact us today at CAB Capital to kickstart your business dreams of running a business.