May 21 (UPI) -- The U.S. Department of Agriculture announced Thursday that it will provide up to $1 billion in guaranteed loans to rural businesses and farmers in response to the COVID-19 pandemic.
The change in policy expands eligibility to agricultural producers that are not eligible for USDA Farm Service Agency loans to receive funding under the Business & Industry provisions included in the Coronavirus Aid, Relief and Economic Security Act.
"Ensuring more rural agricultural producers are able to gain access to much-needed capital in these unprecedented times is a cornerstone of that commitment," USDA Secretary Sonny Perdue said.
The changes also allow the USDA to provide 90 percent guarantees on B&I CARES Act Progam loans, set the application guarantee at 2 percent of the loan, accept appraisals completed within two years of the loan application date, not require discounting of collateral for working capital loans and extend the maximum term for working capital loans to 10 years.
The loans can only be used by rural businesses, including farmers, that were operating as of Feb. 15.