Rural Business Investment

The US Department of Agriculture is currently soliciting applications for non-leveraged RBIC’s or Rural Business Investment Companies.  For those of you who are interested in getting more information about this program, you can download Adobe Reader to read the application procedure and the program notice as well as the RBIP Rules in 7 C.F.R. Part 4290.  The Rural Business Investment Program or RBIP is an interagency program that the SBA and the USDA collaborated on in order to promote the creation of jobs and economic development in rural areas of the US.

By meeting a smaller enterprise’s equity capital investment needs, this program is similar to other venture capital programs that the SBA promotes (see New Markets Venture Capital and Small Business Investment Company programs under the SBA Loans section).  Newly established for-profit venture capital entities are being licensed by the USDA as RBIC’s so that smaller, rural businesses will see the equity and equity-like investments that this government organization is making in their areas.

General Eligibility Requirements

You may be eligible to apply for an RBIC license if you:

  • Employ a management team that is experienced and qualified in the areas of community development financing or venture capital financing
  • Invest in smaller enterprises in order to create employment opportunities and wealth in rural areas
  • Own and operate a for-profit business or a newly established for-profit subsidiary of that business

Additional Requirements

A maximum 10% of investments* made in businesses whose main offices are located in:

  • communities having a population of 50,000 individuals or less
  • in a rural area located outside a standard metropolitan statistical area

A minimum 50% of RBIC investments* in “smaller enterprises” while at least 50% of those being made in “small business concerns.”

A minimum 75% of RBIC investments* must be made in businesses whose main offices are located in:

  • communities having a population of 50,000 individuals or less
  • in a rural area located outside a standard metropolitan statistical area

(*measured by dollars and number invested)

Additionally, individuals who are applying for an RBIC license must identify the targeted rural areas concerned and show how these funds will help those rural areas by practicing disciplined, profit-oriented investing in rural business concerns.

RBIP Rural Area Locator

To find out if a business you are interested is located in an RBIP-qualified rural area, find the USDA Income and Property Eligibility link and select Property Eligibility for Business Programs.  Then select either the Business and Industry Guaranteed Loans or the Rural Business Investment Program from the available options.  You can use either of these options to determine a specific address’ eligibility under the RBIP guidelines.  For more background and other information on the RBIP, see RBIP Fact Sheet.

NOTE:  The application for RBIC status is designed for newly established for-profit venture capital companies who want to obtain an RBIC license and are planning on raising $10 million minimum in private equity capital.  The SBA and USDA will not directly provide debt financing, debt guarantees, or equity financing to smaller companies or other enterprises under the RBIP.  If you are interested in these types of financing visit either the SBA’s website or the USDA’s Rural Development website.

Apply now for free (No Credit Check)