USDA makes spec buildings, revolving loan funds to rural communities
Friday, January 24, 2020
In our look at the partners that make economic development successful in the Corridor, we next turn to the US Department of Agriculture, specifically USDA Rural Development. That’s right, the federal government.
The USDA web site describes rural development as a “mission area.” That somewhat uncertain description is made more specific with this passage: “We offer loans, grants and loan guarantees to help create jobs and support economic development and essential services such as housing; health care; first responder services and equipment; and water, electric and communications infrastructure.”
An essential piece of the USDA’s broad portfolio is the Rural Economic Development Loan & Grant program. Through REDL&G (typically pronounced “red-lag”), the USDA provides zero-interest loans to local utilities which, in turn, pass the money to businesses to support job creation projects in rural areas. Loans can be for as much as $2 million. The businesses must pay the money back, but friendly rates and terms help bend the profitability curve upward.
REDL&G also seeds revolving loan funds operated by rural utilities. Once again, the primary aim is job creation.
Finally, a common use of REDL&G is to fund speculative industrial buildings. Examples in the Corridor are … Well, there are a heck of a lot of them. One recent example is a 30,000 SF spec building in Spirit Lake’s East Lake Industrial Park owned by the Iowa Lakes Corridor Future Fund and available for $799,000.
Add all that up and we’re only through one USDA program. The department also provides business loan guarantees and a plethora of business and community assistance programs. Listing them all here would be tedious, but you can take a look at https://www.rd.usda.gov/programs-services/all-programs.
We’ll close out with a call to Iowa’s congressional delegation to protect funding for USDA Rural Development, one of the few federal “mission areas” truly built for the benefit of small towns and rural areas.
Category: Agriculture, Site Selection, Partnerships, Economic Development, Business Attraction