USDA Business & Industry (B&I) Loans for Rural California Businesses
The USDA Rural Development Business & Industry (B&I) Guaranteed Loan program helps commercial lenders finance businesses in rural areas. In California, that includes packing houses, processors, cold storage, ag service companies, and many other businesses outside the major metros.
How the guarantee works
Rural Development guarantees a portion of a loan made by an eligible lender—banks, credit unions, Farm Credit institutions, and some approved non-regulated lenders. In March 2026, USDA increased the B&I guarantee from 80% to 85% for projects under $5 million for loans obligated in fiscal year 2026, unless a later appropriation changes it. Applications are accepted from lenders year-round, October 1 through September 30.
Who qualifies
- For-profit or non-profit businesses, cooperatives, Tribes, public bodies, and individuals in business
- The project must be in a rural area with a population under 50,000—the business headquarters can be in a larger city
- Many Central Valley, Central Coast, and Northern California communities qualify; eligibility is confirmed by address
Eligible uses
- Business conversion, expansion, repair, modernization, or development
- Purchase and development of land, buildings, and facilities
- Purchase of equipment, machinery, and supplies
- Business acquisitions that save or create rural jobs
- Working capital and certain debt refinancing
Note that USDA has paused applications for biodigester and controlled environment agriculture projects; check current program notices if your project falls in those categories.
B&I vs. FSA vs. SBA
FSA loans serve farmers and ranchers producing ag commodities. B&I serves rural businesses, including ones that process or handle ag products, and typically supports larger loan sizes. SBA programs may also fit; see SBA 7(a) vs. 504. The right choice depends on the business type, location, loan size, and collateral.
What to have ready
- Three years of business financial statements and tax returns
- Interim financials, projections, and a debt schedule
- Project description, sources and uses, and cost estimates
- Appraisals and environmental review for real estate
- Personal financial statements for owners
Rural Development notes that preparation can take from a few weeks to several months depending on complexity. A complete package shortens that.
Talk through your farm or ag business financing →
Related agriculture guides: FSA Farm Loans · USDA B&I Loans · USDA Grants (REAP & VAPG) · California Ag Grants · Bridging the USDA Wait
USDA program limits, guarantee percentages, and funding windows change by fiscal year and appropriation. Figures here reflect published USDA information as of October 2026; confirm current terms before you apply. Grants are competitive and never guaranteed, and every loan is subject to lender and agency underwriting and approval.
California Business Capital is compensated by the capital provider only when financing funds. We do not charge a separate client fee for arranging financing. Lender origination charges, interest, closing costs, and other third-party expenses may still apply and are separate from our compensation. Review the applicable financing agreements and disclosures for the costs and terms of your transaction.
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