Business and Industries Loans (B&I Loans)
for Commercial Property in Small Towns 

Need a Business and Industries Loan (B&I Loan) for a commercial property in a small town?  Call Misty Switzer at 574-936-6387 or email her at misty@blackburne.com.
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Do you want to buy, renovate, or expand a motel, an industrial building or another kind of income property in a small town?  There is a special loan program for commercial properties located in rural areas.  This loan program is called the Building and Industries Loan (B&I Loan) Program.  The U.S. Department of Agriculture (USDA) guarantees these loans, up to 80%, in a manner similar to that of the SBA.

The important difference between an SBA loan and a B&I loan is that these rural properties can even be investor properties, such as apartments!  The Department of Agriculture will also guarantee loans on most  rural commercial buildings, medical clinics, and other special-use properties.  A great many small, independent motels in small towns are financed using B&I loans.

USDA Business and Industries Loan (B & I Loan) Program is a Federal loan guarantee program that is designed to encourage the commercial financing of rural businesses.  The reason why the Federal government is involved is because it wants to create and save rural jobs and improve the economic and environmental climate of rural communities.  The property must be located in a town of less than 50,000 in population.  The maximum loan is $10 million. 
The USDA does not make B&I loans.  The USDA merely guarantees the B&I loan.  B&I loans are usually made by banks.  The bank requests the B & I guarantee, and, if it is approved, the bank makes and services the loan.
The terms of a B&I loan are usually better than those of conventional commercial loans.  These loan are usually fully-amortized over 20 to 25 years at rates slightly lower than conventional commercial mortgage loans.  The rate may be fixed or adjustable.  If the borrower is using the B&I loan to buy a commercial property, the borrower only has to contribute 10% of the acquisition cost.  Leverage is one of the benefits of the B & I Loan Program for businesses because the borrower gets a higher loan amount.  The reason why is because the guarantee strengthens the loan application, allowing the bank to feel comfortable with a smaller equity injection.
A borrower must be engaged in, or proposing to engage in, a business that will (1)  Provide employment; (2)  Improve the economic or environmental climate; (3)  Promote the conservation, development, and use of water for aquaculture; or (4)  Reduce reliance on nonrenewable energy resources by encouraging the development and construction of solar energy systems, and other renewable energy resources.

Below is a list of the authorized uses of the loan funds:  

1. Business and industrial acquisitions, construction, conversion, expansion, repair, modernization or development costs.
2. Purchase of equipment, machinery or supplies.
3. Start-up costs and working capital.
4. Processing and marketing facilities.
5. Pollution control and abatement.
6. Refinancing for viable projects, under certain conditions.
7. Purchase of start-up cooperative stock for family sized farms where commodities are produced to be processed by the cooperative.
   

The USDA Building and Industry Loan (B&I Loan) program is a terrific program if the commercial property is located in a town of less than 50,000 residents.  
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Need a Business and Industries Loan (B&I Loan) for a commercial property in a small town?  Call Misty Switzer at 574-936-6387 or email her at misty@blackburne.com.

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