USDA Business & Industry (B&I) Loans: 80% Guarantee Thresholds, Tangible Net Worth & Amortization

## Capital Structuring Under the USDA Business & Industry Program

The USDA B&I loan program delivers long-term institutional financing to commercial enterprises situated in qualifying rural communities (populations under 50,000).

### 1. USDA Guarantee Tiers and Amortization Schedules

Unlike the SBA 7(a) facility capped at $5,000,000, USDA B&I extends balance sheet capacity up to $25,000,000:

| Asset Class Financed | Maximum Term (Years) | Guarantee Level | Minimum Debt Service Coverage (DSCR) |
|:-----------------------|:--------------------:|:---------------:|:------------------------------------:|
| Real Estate & Land | Up to 30 Years | 80% | 1.25x Historical & Projected |
| Machinery & Equipment | 15 Years (Useful Life)| 80% | 1.25x Historical & Projected |
| Working Capital Lines | 7 Years | 80% | 1.30x Historical & Projected |

$$\text{Tangible Balance Sheet Equity} = \frac{\text{Total Assets} - \text{Intangibles} - \text{Total Liabilities}}{\text{Total Assets} - \text{Intangibles}} \ge 10\%$$

### 2. Fee Structure and Effective Borrowing Costs

Borrowers incur a one-time 3.0% upfront government guarantee fee paid at closing, alongside an annual 0.50% servicing fee assessed against the average outstanding guaranteed balance.