Rural Businesses That Receive USDA Business and Industry Guaranteed Loans Less Likely To Fail

USDA implements several loan and grant programs to support rural businesses. Of these, the Business and Industry (B&I) Guaranteed Loan Program is the largest, with a program level of $892 million (the total value of all loans given under the program) in 2017. By reducing lenders’ risk, the B& I program encourages them to provide more generous terms or larger principal amounts, or to approve loans to rural businesses that they otherwise would not make. ERS researchers found that receiving a B&I loan reduced the risk of business failure, although this effect dropped with time.