TransPecos Banks - USDA Programs

USDA PROGRAMS

USDA Water & Waste Disposal Improving access to clean and reliable Water and Waste Disposal systems for households and businesses in rural areas.

ELIGIBLE USES DRINKING WATER

SANITARY SEWERS

SOLID WASTE DISPOSAL

ELIGIBLE BORROWERS

ELIGIBLE AREAS Rural areas with populations of 50,000 residents or less.

STORM WATER DISPOSAL

Tribal Lands in Rural Areas

Federally Recognized Tribes

Colonia’s

Non-Profit Businesses

Public Bodies

POTENTIAL ELIGIBLE USES (Circumstantial) •

Guarantee and lender fees / legal and engineering fees

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Land acquisition and equipment

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Additional borrower labor to install and extend service

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Initial operating expenses

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Capitalized interest

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Purchase of existing facilities to improve service or prevent loss of service

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Debt refinancing in some instances

WWD EXAMPLE The village of Homer is a small town in Northeast Nebraska located in Dakota County. Residents in parts of the village were experiencing inadequate water pressure with one resident going so far as to drilling their own well.

Maximum daily demands were being met, but overall water production was continuing to decline due to iron bacteria fouling the screens and aquifer.

The project consisted of four major parts: Installation of a new well within 1,000 ft. of an existing well to provide additional water supply source and system backup.

Increasing pressure to used via installation of a booster station.

To make the needed improvements to the water system, the village was able to secure a $823,000 direct loan through the USDA Rural Development Water and Waste Disposal Loan & Grant Program leveraged with village funds of $115,517.

Constructing water mains that helped upgrade the distribution system and reduce impacts of potential breaks and pressure loss.

Various valve installations and replacements.

Restrictions: •

Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.

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Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

Ineligible Uses: If the use of funds does not support the restoration, improvement, or implementation of a reliable water and/or waste disposal system then the loan will be ineligible. www.transpecosbanks.com

USDA Business & Industry The USDA Business & Industry Loan Programs is a government-backed loan designed for eligible rural businesses to obtain the necessary capital to grow and create employment in their local communities.

ELIGIBLE USES

Business Activities

Purchase + Development

such as conversion, enlargement, repair, modernization, or development.

of land, buildings, and infrastructure for commercial or industrial properties.

Purchase + Installation

of machinery and equipment, supplies or inventory.

ELIGIBLE AREAS The borrowers headquarters may be based within a larger city as long as the project is based in an eligible rural area.

Debt Refinancing when such refinancing improves cash flow and creates jobs.

Business + Industrial Acquisitions when the loan will maintain business operations and create or save jobs

ELIGIBLE ORGANIZATIONS/INDIVIDUALS Federally Recognized Tribes

Rural areas with populations of 50,000 residents or less.

Non-Profit Businesses

Public Bodies

Individuals engaged or proposing to engage in a business

B&I EXAMPLE Expansion is a common theme in Virginia Diner’s history and has developed into a thriving gourmet mail-order business and international brand from a 1929 dining car. Since the diner was established in Wakefield at the center of Virginia’s peanut industry, peanuts soon became the staple menu item in its history. For the last 39 years, husband and wife William and Mary Ann Galloway have owned the company.

The company now includes a peanut production and distribution facility with a diverse sales mix. However, the family still saw an opportunity to expand. In order to do so, the company needed to address capacity and storage issues.

In 2015, USDA Rural Development (RD) contributed a Business and Industry Loan Guarantee (B&I) to help Virginia Diner refinance an existing loan, pay for the purchase of a warehouse facility, and pay for closing costs. “[The loan is] helping us to create more year-round business. That’s the goal here because of our seasonality,” Epperson said. The company now has the capacity to increase its cash flow and to add more full-time positions as an alternative to temporary employees.

Restrictions:

Ineligible Uses:

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Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.

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Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

• Lines of credit (LOC) • Owner-occupied and rental housing • Golf courses or golf course infrastructure • Racetracks or gambling facilities • Churches or church-controlled organizations • Fraternal organizations • Lending, investment, and insurance companies • 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.` www.transpecosbanks.com

USDA Community Facility An essential Community Facility is a public improvement, operated on a non-profit basis, that is needed for the orderly development of a rural community. Facility refers to both the physical structure, and the resulting service provided to rural residents or rural businesses.

ELIGIBLE USES

WHO MAY QUALIFY Public Bodies

$100MM Maximum amount guaranteed loan

Funds can be used to construct, enlarge, extend, or otherwise improve essential community facilities.

Guaranteed funds can also be used for refinancing the debt of an essential community facility.

Non-Profit Businesses Federally Recognized Tribes Indian Tribes on Federal and State Reservations

ADDITIONAL REQUIREMENTS •

Applicants must have legal authority to construct, operate, and maintain the proposed facilities and services and to obtain, give security for, and repay the proposed loan

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Applicants must be unable to finance the project from their own resources or through commercial credit at reasonable rates and terms

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Applicants must provide evidence of significant community support

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Non-profit organizations must have significant ties to the project service area

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Tax exempt financing cannot be guaranteed by this program

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Facilities must be for public use and serve the rural area where they are /will be located

CF EXAMPLE Carbon County Pennsylvania opened the doors to its newest hospital in 65 years on November 21, 2021.

The trauma-4 facility is expected to treat about 50,000 emergency care patients a year, thanks to a $98.5MM Community Facilities direct USDA loan investment for the project and a $16MM guaranteed loan.

Local healthcare officials said they are confident the threestory, 80-patient-room, and 160,000-square-foot facility will redefine health care access, convenience, and quality for the local population and surrounding areas. This is the biggest project in Franklin Township’s history and provide the community with highly comprehensive care.

Restrictions: •

Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence.

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Private-entity borrowers must demonstrate that loan funds will remain in the U.S. and the facility being financed will primarily create new or save existing jobs for rural U.S. residents.

“This is a big economic driver in the community,” said Bob Morgan, the state director for USDA RD in Pennsylvania.

“If you have an opportunity to locate a new facility, one of the things that you want to provide is not only great health care for your employees, but also, the ability to receive it without having to travel great distances… it makes Carbon County more attractive in the economic marketplace.”

Ineligible Uses: • Lines of credit (LOC) • Owner-occupied and rental housing • Golf courses or golf course infrastructure • Racetracks or gambling facilities • Facilities used for inherently religious activities • Projects that create, directly or indirectly, a conflict of interest • Inherently commercial enterprises www.transpecosbanks.com

USDA Rural Energy for America The Rural Energy for America Program provides financial assistance to agricultural producers and rural small businesses to purchase, install, and construct renewable energy systems or energy efficiency improvements.

ELIGIBLE APPLICANTS

ELIGIBLE USES Installation and Construction of Energy Efficiency Improvements

Agricultural producers with 50%+ gross income from agricultural operations and small businesses in eligible rural areas Applicants have NO outstanding delinquent federal taxes, debt, judgment, or debarment

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High efficiency heating, ventilation, and air conditioning systems (HVAC)

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Insulation, doors, and windows

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Lighting

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Cooling or refrigeration units

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Electric, solar or gravity pumps for sprinkler pivots

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Switching from a diesel to electric irrigation motor

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Replacement of energy-inefficient equipment

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Agricultural producers may also use guaranteed loan funds to install energy efficient equipment and systems for agricultural production or processing

Applicants provides at least 75% of the project cost if applying for a grant only and at least 25% of the project cost if applying for a loan

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All projects must have technical merit and utilize commercially available technology

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Energy efficiency projects require an energy audit or assessment

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Renewable Systems Biomass (for example: biodiesel and ethanol, anaerobic digesters, and solid fuels)

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Geothermal for electric generation or direct use

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Hydropower below 30 megawatts

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Hydrogen

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Small and large wind generation

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Small and large solar generation

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Ocean (tidal, current, thermal) generation

ELIGIBLE AREAS •

Rural areas with populations of 50,000 residents or less.

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Tribal lands in rural areas or Colonias.

ADDITIONAL REQUIREMENTS

GRANT AVAILABILITY Renewable Energy System Grants: •

$2,500 minimum

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$500,000 maximum

Energy Efficiency Grants: •

$1,500 minimum

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$250,000 maximum

REAP EXAMPLE A farm in a very small, rural community in southern Oregon had a parcel of land that was hardly worth the effort to plant due to the low-quality soil and poor irrigation.

The field was left fallow until a developer leased the field and installed a $23MM solar energy production facility.

The electricity generated is sold to the local utility, helping it meet the state’s renewable energy standards, and provides the local community with a new option for environmentally friendly power.

The developer of this solar power plant was able to secure a loan with help from USDA Rural Development, which provided a $10 million loan guarantee through its Rural Energy for America Program and a $5 million guarantee through its Business and Industry Program, helping to mitigate the risks.

This new solar panel array is diversifying a local farm’s income, improving the community’s economy, and producing nearly 14 megawatts of renewable electricity per year, which is enough to power 2,534 homes.

Restrictions: Individual borrowers must be citizens of the United States or reside in the U.S. after being legally admitted for permanent residence. www.transpecosbanks.com

Get started on your application today. The process simple, transparent, and fast.

We can’t wait to help you build your community. info@transpecosbanks.com

www.TransPecosBanks.com