More Rural Loans And Grants Announced By USDA

More Rural Loans And Grants Announced By USDA

Despite budget uncertainty, USDA is still funding community economic development programs for rural areas.

FAQ: With budget cutting starting to take place in Washington D.C., what is happening to USDA funding for rural economic development programs at least at this point in time?

Answer: U.S. Agriculture Secretary Tom Vilsack recently approved the selection of organizations in 11 states for loans and grants to support job creation efforts and business development, and to strengthen economic growth in rural communities. USDA remains focused on carrying out its mission, despite a time of significant budget uncertainty, said Vilsack.

This recent funding announcement is one part of the USDA's efforts to strengthen the rural economy, says USDA Rural Utilities Service Administrator John Padalino.

RURAL DEVELOPMENT GRANTS: U.S. Secretary of Agriculture Tom Vilsack recently approved another round of funding for programs that help create jobs and economic opportunity in rural communities.

"These investments will give rural businesses and local organizations more access to capital and new markets, allowing them to expand and increase hiring," he says. "Between 2009 and 2011, USDA used $1.4 billion in government funds to provide nearly $7 billion in loans and grants to help rural businesses grow and innovate. This kind of investment creates and saves jobs in rural communities and builds thriving economies for the long term, all major goals of the Obama Administration and USDA."

USDA announces funding to create jobs and economic opportunity in rural communities

The $11.8 million announced is being provided through USDA's Rural Economic Development Loan and Grant program, or REDLG. It provides zero-interest loans and grants to local utilities which then, in turn, lend the funds through to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas. The program funds business start-up or expansion, business incubators, education and training facilities and equipment, community development assistance, health care and other community projects that support rural jobs.

For example, in October 2012, the Central Iowa Power Cooperative received a Rural Economic Development loan to help Precision Pulley and Idler, an employee-owned manufacturer in Pella, Iowa, expand its facilities to meet increased demand for the company's products. The Pella operation has almost 200 employees and is the third-largest employer in the area.

Since 2008 the REDLG program has helped create or save an estimated 25,000 rural jobs, provided $200 million in economic development assistance, improved manufacturing capability, expanded health care and educational facilities, and has either expanded or helped establish over 900 rural businesses and community projects.

The most recent announcement will support 26 projects in 11 states. The following is a list of rural utilities that will receive USDA funding, which is contingent upon the recipient meeting the terms of the loan or grant agreement.

Iowa rural utilities are included in these recent grants

* Access Energy Cooperative: $495,000 loan and $300,000 grant. To create a pass-through loan for the Henry County Health Center to buy equipment for the surgical and medical departments. The fund will create three jobs and help retain 300 positions.

* Access Energy Cooperative: $300,000 grant to establish a pass-through loan fund to buy land for the Wayland Industrial Development Corporation's new industrial park.

* Panora Communications Cooperative: $300,000 grant to establish a loan fund to help Lakeshore Family Dentistry build a clinic in Panora. The project will create four jobs.

* Interstate 35 Telephone Company: (Interstate Communications) $280,000 grant to establish a loan fund to help Warren County upgrade a roadway associated with expansion of an industrial business. The project will create 14 jobs and help retain seven existing ones.

* Ogden Municipal Utilities: $300,000 grant to establish a loan fund to help Ogden Legacy, Inc., build a modern medical facility in downtown Ogden. The facility will help Ogden retain its doctor and expand medical services in the community. The project will help retain seven jobs.

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