B&I CARES Act Loan Program

LaGray Finance is committed to helping businesses in the healthcare and hospitality space meet their financial needs during the Coronavirus pandemic. We especially want to assist businesses located in rural America. We are pleased to offer working capital loans through the USDA Business & Industry (B&I) CARES Act Program, included in the CARES stimulus package, to businesses in rural America.

If you have a hospitality or healthcare business located in a rural area and have been affected by the coronavirus, LaGray Finance will work with you to access funds from $250,000 – $25,000,000 that is available through the USDA B&I CARES Act Program

The following is information that businesses need to know about the B&I CARES Act Loan Program. The information is subject to change with guidance from USDA (B&I) and the White House.

In response to the national COVID-19 Public Health Emergency, USDA Rural Development on May 22nd, 2020, provided additional funding assistance in budget authority appropriated under the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The USDA has made up to $1 billion in loan guarantees available to businesses in rural America. The Business and Industry (B&I) CARES Act Program offers loans to businesses for working capital to support business operations and facilities in rural areas.  The loan funds must be used as working capital to prevent, prepare for, and respond to the Coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on February 15, 2020.

  • For-profit businesses
  • Nonprofits
  • Cooperatives
  • Federally recognized Tribes
  • Public bodies
  • Agricultural Producers (when the loan request exceeds the maximum loan available through the Farm Service Agency (FSA) guaranteed loan program or the request is ineligible for FSA loans)
  • Rural areas outside of a city or town with a population of fewer than 50,000 people
  • The borrower’s headquarters may be based within a larger city as long as the project is located in an eligible area
  • Projects may be funded in rural and urban areas under the Local and Regional Food System Initiative. Check eligible addresses for Business Programs
  • Borrowers must have been in operation on February 15, 2020
  • Loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.
  • Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.
  • Private-entity borrowers must demonstrate that loan funds will remain in the U.S.

Loans must be used as working capital to prevent, prepare for, or respond to the effects of the coronavirus pandemic. These include:

  • Wages, salaries, sales commissions to employees, group healthcare and other employee benefits
  • Administrative expenses and administrative service contracts
  • Property insurance, hazard insurance, and other business insurance
  • Principal and interest payments excluding owner/stockholder debt and related-party debts
  • Rent, payments on leases, and routine maintenance
  • Utilities
  • Inventory, feed, seed, fertilizer and chemicals, livestock (except for breeding) and supplies
  • Marketing, shipping, and other expenses incurred through normal business operations
  • Taxes
  • Loan costs and essential loan-related expenses

Loan proceeds may not be used for the following ineligible expenditures as specified by the USDA:

  • Purchase and development of land, buildings, and associated infrastructure for commercial or industrial properties, including expansion or modernization.
  • Business acquisitions.
  • Leasehold improvements.
  • Constructing or equipping facilities.
  • Purchase of machinery and equipment; and
  • Debt refinancing unless such debt refinancing is for debts incurred subsequent to February 15, 2020, for eligible purposes.
  • Lines of credit.
  • Owner-occupied and rental housing.
  • Golf courses.
  • Racetracks or gambling facilities.
  • Churches, church-controlled organizations, or charitable organizations.
  • Fraternal organizations.
  • Lending, investment, and insurance companies.
  • Projects involving more than $1 million and the relocation of 50 or more jobs.
  • Agricultural production, with certain exceptions.
  • Distribution or payment to a beneficiary of the borrower or an individual or entity that will retain an ownership interest in the borrower.

You can borrow up to $25 million, but the maximum is 12 times your total average monthly cost of doing business.

For example, if your average monthly working capital = $21,000, then the maximum amount you can borrow is 12 X 21,000, which is $252,000.
LaGray Finance will facilitate loan amounts of $250,000 to $25,000,000

  • $25MM max
  • 10-year term
  • Principal and interest deferrals up to 12 months from loan closing, extended principal deferral available up to three years
  • No appraisal required for loans under $1MM.

Yes. It is our understanding that getting this loan will not affect your future USDA B&I Loan runway or total dollars allowed from the USDA.

Collateral must have documented value sufficient to protect the interest of the lender and the Agency. The collateral value must be at least equal to the loan amount. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).

  • Maximum term is 10 years.
  • Loans must be fully amortized; balloon payments are not permitted.
  • Interest-only payments may be scheduled in the first 3 years.
  • Interest rates are negotiated between the lender and borrower, subject to USDA review.
  • Rates may be fixed or variable.
  • Variable interest rates may not be adjusted more often than quarterly.
  • There is an initial guarantee fee of 2 percent of the guaranteed amount.
  • There is an annual renewal fee, currently 0.5 percent of outstanding principal.
  • The proposed operation must have a realistic repayment ability.
  • The business and its owners must have a good credit history.
  • Key person life insurance may be required, and the amount negotiated. A decreasing term life insurance is acceptable.
  • Personal and corporate guarantees are normally required from all proprietors, partners (except limited partners) and major shareholders (all those with a 20 percent or greater interest).

How to Apply

Fill in the application below!
As soon as we receive your application, one of our team members will reach out to you to guide you through the next steps.
Once we have been able to review your application and documents, we will make funds available to help you recover your business.

Fill Out Our Loan Request Form Below

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