Scotland County Business Receives USDA Loan
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By Heather Harper
On February 2, 2022, Rural Development State Director Kyle Wilkens announced more than $34 million in funding was awarded to recipients in rural Missouri to support local businesses to create better employment opportunities and strengthen rural Missouri’s economy. One of those businesses was Zimmerman Manufacturing, located on State Route P in Memphis, MO.
Zimmerman Manufacturing received a $1,410,000 loan to refinance debt and provide working capital for this agriculturally based manufacturing business in Scotland County. In an interview with State Director Wilkens, he spoke about the purpose of the loan program.
Zimmerman Manufacturing, an agriculturally based manufacturing business, was deemed eligible under the Business and Industry Guaranteed Loan requirements. Project Information:
In Fiscal Year 2021, 33 businesses in rural Missouri received a total of 66.5 million in Business and Industry Guaranteed loans. Regarding stipulations when the loan is awarded, Wilkens stated, “the borrower and lender are required to comply with federal regulations related to the program.”
To be eligible for a Business and Industry Guaranteed Loan, businesses must be in a rural area and cannot have any delinquent federal debt. Any state or federally chartered bank such as a credit union or farm credit system lenders may apply for the loan guarantee.
Regarding making sure the money from the loan is being used accordingly and for its intended purpose, Wilkens had this to say: “the USDA obtains copies of loan documents including loan settlement and disbursement statements to verify loan funds were used for eligible purposes.” The borrower is fully liable for repaying the debt.
When asked what kind of debt refinances the loan is allowed to cover, Wilkens said, regarding refinancing, “the original loan must have been eligible for purposes under the Business and Industry Loan Program regulations. The business must demonstrate sufficient income to repay the loan.” Regarding working capital, Wilkens stated that working capital can be used to pay for business operating expenses including inventory, materials, supplies, and other start-up costs. He further stated, “all loans must have adequate collateral to fully secure the loan and the borrower must meet the minimum credit and equity requirements.”
USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements and business development, housing, community facilities such as schools, public safety, and health care, and high-speed internet access in rural Missouri.