Best Grants for Rural Development in California

What does this program do?

It provides loans and grants to Microenterprise Development Organizations (MDOs) to:

• To help microenterprises startup and growth through a Rural Microloan Revolving Fund.
• Provide training and technical assistance to microloan borrowers and micro entrepreneurs.

Microenterprise Development Organizations must demonstrate experience in managing a Revolving Loan Fund, or:

• Certify that it or its employees have received education and training from a qualified microenterprise development training entity so that the applicant has the capacity to manage such a revolving loan fund.
• Demonstrate that it is actively and successfully participating as an intermediary lender in good standing under the U.S. Small Business Administration (SBA) Microloan Program or other similar loan programs as determined by the Administrator.

 What kind of funding is available? 

• Grants are available to provide technical assistance to rural micro-entrepreneurs or microenterprises, up to $205,000 annually.
  • Funding at the requested level is not guaranteed, and at least 15 percent matching funds are required.
• Loans of $50,000 to $500,000 may be used for establishing a Rural Microloan Revolving Fund managed by the Microenterprise Development Organization.
  • Total aggregate debt is capped at $2.5 million.

What are the loan terms? 

• Maximum term is 20 years.
• Two-year payment deferral.
• Must establish a loan loss reserve fund.

What terms are required on loans to ultimate recipients? 

• Up to $50,000.
• Fixed interest rate.
• Limited to 75 percent of project cost.

How may the funds be used? 

Microlenders may make microloans for qualified business activities and expenses including, but not limited to:

• Working capital.
• Debt refinancing.
• Purchasing equipment and supplies.
• Improving real estate.

Rural public entities in California, including towns, nonprofit corporations, higher education institutions, tribes, and eligible cooperatives, can seek funding to support small rural businesses and community economic development. With a mission to strengthen rural economies, USDA Rural Development provides grants of US $100,000 - US $500,000 for technical assistance, infrastructure, business incubators, and other rural development projects.