USDA Rural Economic Development Loan and Grant Program

The REDLG program provides funding to rural projects through local utility organizations. Under the REDLoan program, USDA provides zero interest loans to local utilities which they, in turn, pass through to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas. The ultimate recipients repay the lending utility directly. The utility is responsible for repayment to the Agency. Under the REDGrant program, USDA provides grant funds to local utility organizations which use the funding to establish revolving loan funds. Loans are made from the revolving loan fund to projects that will create or retain rural jobs. When the revolving loan fund is terminated, the grant is repaid to the Agency.

To receive funding under the REDLG program (which will be forwarded to selected eligible projects) an entity must: have borrowed and repaid or pre-paid an insured, direct, or guaranteed loan received under the Rural Electrification Act; be a not-for-profit utility that is eligible to receive assistance from the Rural Development Electric or Telecommunication Program; or be a current Rural Development Electric or Telecommunication Programs Borrower

REDLG grantees and borrowers pass the funding on to eligible projects. Examples of eligible projects include: capitalization of revolving loan funds, technical assistance in conjunction with projects funded under a zero interest REDLoan, business Incubators, community development assistance to non-profits and public bodies (particularly job creation or enhancement), facilities and equipment for education and training for rural residents to facilitate economic development, facilities and equipment for medical care to rural residents, or telecommunications/computer networks for distance learning or long distance medical care.