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Rural Businesses That Receive USDA Business and Industry Guaranteed Loans Less Likely To Fail

Anil Rupasingha and John Pender

Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, 2019, vol. September 2019, issue 08

Abstract: USDA implements several loan and grant programs to support rural businesses. Of these, the Business and Industry (B&I) Guaranteed Loan Program is the largest, with a program level of $892 million (the total value of all loans given under the program) in 2017. By reducing lenders’ risk, the B& I program encourages them to provide more generous terms or larger principal amounts, or to approve loans to rural businesses that they otherwise would not make. ERS researchers found that receiving a B&I loan reduced the risk of business failure, although this effect dropped with time.

Keywords: Agribusiness; Agricultural Finance; Community/Rural/Urban Development; Financial Economics; Institutional and Behavioral Economics (search for similar items in EconPapers)
Date: 2019
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DOI: 10.22004/ag.econ.302871

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