The overall purpose of the REDLG program is to promote rural economic development and job creation projects. The program is designed to encourage rural electric and telecommunications utilities to promote rural economic development and job creation by providing funding through loans and grants. The funds provided by the REDLG program must then be used to help finance projects such as business start-up costs, business expansion, community development, and business incubator projects.
This program contains two sub-programs that administer funding opportunities. They are the REDLoan program and the REDGrant program. To apply for either program, entities must contact their Rural Development State Office.
What is the REDLoan Program?
Under the REDLoan program, the USDA provides zero interest loans to awardees which they, in turn, pass through to local businesses (ultimate recipients) at zero percent interest for projects that will create and retain employment in rural areas. The ultimate recipients repay the lending utility directly and the utility repays the Agency.
Under the REDGrant program, the 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.
How much funding has been available?
For FY 2020, the REDLG program will have the maximum amount for awards were $2 million in loan funding and $300,000 in grant funding. Appropriated funding for REDLG for FY 2019 was 56.9 million. See the list below for funds of previous fiscal years.
For FY 2018, the REDLG program had $51.37 million available through loans and grants. The maximum amount for awards were $2 million in loan funding and $300,000 in grant funding.
In FY 2016, this program had available loan funding of $37 million and grant funding of $11 million. The maximum loan amount was anticipated at $1 million and the maximum grant amount was $300,000.
For FY 2015, the REDLG program had $38.6 million available for loans and $9.2 million for grants. Applicants can apply for a maximum of $300,000 in grant funds and up to $1 million in loans. To view loan and grant awardees, click here.
For FY 2014, the REDLG program had $30.6 million in available funds for loans and $9.2 million in grants. The maximum award amount for loans is $2 million and the maximum award for grants is $300,000.
How can funds be used?
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
- Telecommunications/computer networks for distance learning or long distance medical care
- Have borrowed and repaid or prepaid an insured, direct, or guaranteed loan received under the Rural Electrification Act or,
- Be a not-for-profit utility that is eligible to receive assistance from the Rural Development Electric or Telecommunication Program
- Be a current Rural Development Electric or Telecommunication Programs Borrower
For more information, visit the USDA’s website.
