Opportunity Information: Apply for RD RBCS 25 REDLG
The Rural Economic Development Loan and Grant (REDLG) opportunity is a USDA Rural Business-Cooperative Service program designed to finance rural economic development projects through local utility organizations rather than funding businesses directly. The basic structure is a pass-through model: USDA works with eligible utility entities, and those utilities then provide financing to local businesses and community-based projects (often called the "ultimate recipients") that are expected to create or retain jobs in rural areas.
The program offers two main funding tools. First, USDA can provide zero-interest loans to eligible local utility organizations. The utility then re-lends those funds to rural businesses or other local eligible projects, and the ultimate recipient repays the utility according to the terms the utility sets. After that, the utility is responsible for repaying USDA, effectively serving as the intermediary lender and administrator. Second, USDA can provide grants to eligible utilities to help them establish Revolving Loan Funds (RLFs). With an RLF, the utility makes loans from the fund to support rural job creation or job retention projects, and as borrowers repay, the money revolves back into the fund to be lent again. A notable feature in the grant structure described here is that when the revolving loan fund is terminated, the grant amount must be repaid to USDA, which makes it different from many traditional grant programs that do not require repayment.
Award sizes are capped based on the assistance type. The anticipated maximum per award is up to $2,000,000 for loans and up to $300,000 for grants. USDA expects to make about 40 awards under this opportunity, indicating a moderate level of selectivity depending on demand, geographic distribution, and project quality.
Eligibility is focused on utility organizations with ties to USDA Rural Utilities Service or Rural Development infrastructure programs. Entities that can apply include former Rural Utilities Service borrowers that have borrowed, repaid, or prepaid an insured, direct, or guaranteed loan; nonprofit utilities that are eligible for assistance through Rural Development Electric or Telecommunication Programs; and current borrowers in the Rural Development Electric or Telecommunication Programs. In practice, this means the applicant is typically a utility or utility-like nonprofit entity, and the businesses that ultimately benefit are downstream recipients financed by the utility rather than direct federal grantees or borrowers.
From a categorization standpoint, the opportunity is listed as discretionary and falls under broad activity areas including agriculture, business and commerce, community development, education, health, and regional development. The CFDA (now often referenced under Assistance Listings) number associated with the program is 10.854. The funding opportunity number is RD RBCS 25 REDLG, and the stated closing date is June 30, 2025.Apply for RD RBCS 25 REDLG
- The Rural Business-Cooperative Service in the agriculture, business and commerce, community development, education, health, regional development sector is offering a public funding opportunity titled "Rural Economic Development Loan and Grant" and is now available to receive applicants.
- Interested and eligible applicants and submit their applications by referencing the CFDA number(s): 10.854.
- This funding opportunity was created on 2024-08-26.
- Applicants must submit their applications by 2025-06-30. (Agency may still review applications by suitable applicants for the remaining/unused allocated funding in 2026.)
- The number of recipients for this funding is limited to 40 candidate(s).
- Eligible applicants include: Others.
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Frequently Asked Questions (FAQs) - Rural Economic Development Loan and Grant (REDLG)
What is the Rural Economic Development Loan and Grant (REDLG) program?
The Rural Economic Development Loan and Grant (REDLG) opportunity is a USDA Rural Business-Cooperative Service program that supports rural economic development projects through a pass-through financing model. Instead of providing funding directly to businesses, USDA provides assistance to eligible local utility organizations, which then provide financing to local businesses and eligible community-based projects (often referred to as the "ultimate recipients").
Does REDLG fund businesses directly?
No. Under REDLG, USDA does not fund businesses directly. USDA works with eligible utility organizations, and those utilities provide loans or other financing to the local businesses and eligible projects that will use the funds.
Who applies to USDA under this opportunity?
The applicant to USDA is an eligible local utility organization (not the local business). The utility acts as the intermediary that receives support from USDA and then provides financing to the ultimate recipients in rural areas.
Who are "ultimate recipients" in REDLG?
"Ultimate recipients" are the rural businesses and eligible community-based projects that receive financing from the participating utility organization. These projects are expected to create or retain jobs in rural areas.
What are the two main types of assistance available under REDLG?
REDLG provides two primary tools:
- Zero-interest loans from USDA to eligible utility organizations, which the utilities then re-lend to rural businesses or other eligible projects.
- Grants to eligible utility organizations to help establish Revolving Loan Funds (RLFs) used to finance rural job creation or retention projects.
How do REDLG loans work (basic structure)?
USDA provides a zero-interest loan to an eligible utility organization. The utility then re-lends those funds to rural businesses or other eligible local projects. The ultimate recipient repays the utility based on the terms established by the utility, and the utility is responsible for repaying USDA.
How do REDLG grants work through Revolving Loan Funds (RLFs)?
USDA provides a grant to an eligible utility to establish a Revolving Loan Fund (RLF). The utility makes loans from the RLF to eligible rural projects aimed at job creation or job retention. As borrowers repay their loans, funds return to the RLF and can be lent out again (the money "revolves").
Do REDLG grants ever have to be repaid?
Yes, in the structure described here, there is an important repayment feature: when the Revolving Loan Fund (RLF) is terminated, the grant amount must be repaid to USDA. This differs from many traditional grant programs where repayment is not typically required.
What is the maximum award amount for a REDLG loan?
The anticipated maximum per award for loans is up to $2,000,000.
What is the maximum award amount for a REDLG grant?
The anticipated maximum per award for grants is up to $300,000.
How many awards does USDA expect to make under this opportunity?
USDA expects to make about 40 awards.
How competitive or selective is this opportunity likely to be?
USDA anticipates about 40 awards, suggesting a moderate level of selectivity depending on factors such as demand, geographic distribution, and project quality.
What types of organizations are eligible to apply as the utility intermediary?
Eligibility is focused on utility organizations with ties to USDA Rural Utilities Service or Rural Development infrastructure programs. Eligible entities include:
- Former Rural Utilities Service borrowers that have borrowed, repaid, or prepaid an insured, direct, or guaranteed loan
- Nonprofit utilities eligible for assistance through Rural Development Electric or Telecommunication Programs
- Current borrowers in the Rural Development Electric or Telecommunication Programs
If a business wants REDLG support, should the business apply to USDA?
No. Based on the program structure described, the business is not the direct federal applicant. Businesses typically seek financing from an eligible utility organization participating in the program, since the utility is the entity that applies to USDA and administers the downstream financing.
What is the role of the utility organization in the program?
The utility organization serves as the intermediary lender and administrator. It receives the USDA loan or grant support, provides financing to ultimate recipients, sets repayment terms for those recipients, collects repayments, and (for USDA loans) repays USDA.
What outcomes are the projects expected to achieve?
The financed projects are expected to create or retain jobs in rural areas.
What broad activity areas does this opportunity cover?
The opportunity is categorized under broad activity areas including agriculture, business and commerce, community development, education, health, and regional development.
Is this a discretionary funding opportunity?
Yes. The opportunity is listed as discretionary.
What is the CFDA/Assistance Listings number for REDLG?
The CFDA (now often referenced under Assistance Listings) number associated with this program is 10.854.
What is the funding opportunity number?
The funding opportunity number is RD RBCS 25 REDLG.
What is the closing date for this opportunity?
The stated closing date is June 30, 2025.
Which USDA office or service is associated with this program?
This opportunity is described as a USDA Rural Business-Cooperative Service program and is tied to eligible entities connected with USDA Rural Utilities Service or USDA Rural Development Electric or Telecommunication Programs.
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