Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Apr 10, 2013

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The USDA is seeking organizations who want to re-lend business loans.

It has recently unveiled it intends to court non-profit and public organizations that will offer commercial financing to stimulate job growth.

According to the USDA’s press release on the initiative, these business loans are to be made available through the USDA’s Intermediary Relending Program (IRP). The initiative is intended to be part of the Obama Administration’s ongoing attempts to use private investments paid for by public funds in order to create jobs in rural sectors.

The program operates by having the USDA lend money to intermediaries which then re-lend the money as commercial financing to rural businesses. These businesses are typically not able to obtain financing without government assistance. With the income the intermediaries obtain from the businesses as they repay their commercial debt, the intermediaries are then able to make additional business loans to new rural commercial entities.

The program has already been a success in Alabama where a $500,000 loan led to increased energy efficiency in the area, in addition to the purchasing of equipment for a small business that later created seven jobs.

While the IRP will fund a variety of businesses, the goal is to primarily focus on rural commercial entities in areas that are economically disadvantaged and remote, rather than lending to booming parts of the nation.

Jay Fletcher, Assistant Director of Legislative and Public Affairs at the USDA, told loans.org that it would be difficult to predict how many jobs the IRP business loans would create since each loan would operate differently and uniquely.

Fletcher also said that the requirements for receiving approval would focus around the purpose of their use and need. He also said that it would be difficult for him to speculate on whether the bulk of commercial financing would end up being lent to rural businesses or community development groups.

(Interview with Mr. Fletcher conducted by Isaac Juarez)