Rural Business Development Grants (RBDG)

What is an RBDG?

One of the effects of the 2014 Farm Bill was the consolidation of two existing programs: the Rural Business Opportunity Grant (RBOG) and the Rural Business Enterprise Grant Program (RBEG). The Rural Business Development Grants (RBDG) provide targeted assistance for small (less than 50 employees and $1 million in gross revenues) and emerging businesses in rural areas. The goal of this program is to assist in developing and expanding  these rural businesses so that they can create a positive economic impact on the surrounding area. Many types of groups, such as towns and communities, state agencies and authorities, nonprofit corporations, institutions of higher education, federally recognized tribes, and rural cooperatives are eligible for this grant.

The program’s activities are divided into two categories: enterprise type (small and emerging businesses) and opportunity type (projects in rural areas). While there is no maximum amount for enterprise type grants (REBG), most typically range from $50,000 to $500,000 with no cost sharing requirement. Opportunity type grants (RBOG) are limited to up to 10% of annual funding.

For more information about applying for the RBDG, check with your local or state office for state specific details.

How much funding has been available?

2020

The 2020 RBDG program’s deadline is March 31, 2020. This Awardees will be announced later this year. More information and application packages can be found at your local Rural Development office, as well as here.

2018

The 2018 RBDG program had a total of $34 millions in funding available.

2017

The 2017 RBDG program had a total of $24 million in funding available.

2016

The 2016 RBDG program awarded $24 million.

2015

This year, the RBDG program awarded over $19.5 million to 385 applicants across the nation. Click here to view a full list of awardees.

2014

The 2014 programs (RBOG & RBEG) awarded $26.6 million in grant funding for projects.

2013

The 2013 programs (RBOG & RBEG) made available $24.7 million in funds for both enterprise and opportunity type projects.

How can the funds be used?

An enterprise grant can fund:

• Capitalization of revolving loan funds including funds that will make loans for start-ups and working capital
• Distance adult learning for job training and advancement
• Rural transportation improvement
• Community economic development
• Technology-based economic development
• Feasibility studies and business plans
• Leadership and entrepreneur training
• Rural business incubators
• Long-term business strategic planning

An opportunity grant can fund:

• Leadership and entrepreneur training
• Rural business incubators
• Long-term business strategic planning

Who can apply?

Rural public entities including but not limited to:

• Nonprofit corporations
• Institutes of Higher Education
• Federally recognized tribes
• Rural Cooperatives

How are applications judged?

• Show evidence that job creation will occur with local businesses
• Percent of nonfederal funding that is committed to the venture
• The economic need in the area that will benefit from the project
• The project’s consistency with local economic development priorities
• The grantees’ experience with similar efforts/projects

RBDG Scoring Criteria

There are 265 points available in total: 215 points based on your application and 50 given at the discretion of the USDA. These points are awarded based on the following 10 criteria:

(a) Matching Funds (30 Points) – Points are awarded on a graduated scale based on Rural Development’s portion of the funding.

(b) Economic Distress (40 Points) – Points will be awarded for each of the following criteria met by the community receiving the benefit of the grant; (1) Trauma due to a natural disaster – 15 points. (2) Economic distress due to the loss of 20 percent or more of total jobs – 15 points. (3) Long-term poverty – 10 points. (4) Population decline – 10 points.

(c) Population (15 Points) – Points are awarded on a graduated scale based on population size.

(d) Unemployment (20 Points) – Points will be awarded on a graduated scale based on unemployment rate compared to the state level.

(e) Median Household Income (25 Points) – Points are awarded based on the grant benefit area’s median household income compared to the poverty line and state MHI.

(f) Experience (30 Points) – Points are awarded based on years of applicant experience in the type of activity detailed in the grant. Evidence of experience may be a description of experience certified by resumes and other means.

(g) Small Business Start-up or Expansion (25 Points) – Applicant has evidence that small business development will be supported by startup or expansion as a result of the activities  to be carried out under the grant. Written evidence of commitment by a small or emerging business must be provided to the Agency, 5 points for each letter.

(h) Jobs Created or Supported (25 Points) – The anticipated development, expansion, or furtherance of business enterprises as a result of the proposed Project will create and/or support existing jobs associated with the affected businesses. The number of jobs must be evidenced by a written commitment from the business to be assisted.

(i) Size of Grant Request (25 Points) – (1) less than $100,000 – 25 points, (2) $100,000 to $200,000 – 15 points, (3) more than $200,000 but not more than $500,000 – 10 points.

(j) Indirect cost (5 Points) – Applicant is not requesting grant funds to cover their administrative or indirect costs.

(k) Discretionary Points (50 Points) – Either the State Director or Administrator may assign up to 50 discretionary points to an application with a written justification. Permissible justifications are geographic distribution of funds, special Secretary of Agriculture initiatives such as Priority Communities, or a state’s strategic goals.

For more information about this grant program, visit the USDA’s RBDG web page.