USDA energy efficiency improvement grants and loan guarantees available for producers and rural smal

Start the process now for USDA Rural Development producer and rural business grant and loan guarantee applications for energy efficiency improvement projects due June 15, 2011.

USDA Rural Development has announced Rural Energy for America Program (REAP) grants and loan guarantees for agricultural producers and rural small businesses. Michigan has been allocated more than $1.2 million for the program.

USDA defines an eligible producer as an individual or entity that derives at least 50% of its gross income from direct agricultural production in rural or non-rural settings. An eligible rural small business meets the standards set forth by the Small Business Administration, which many Michigan businesses meet. Certain electric utility companies and tribal governments are also eligible. Lenders may apply for loan guarantees for farmers or small businesses.

Energy Efficiency Improvement Program (EEI) projects that may be considered include energy efficient equipment retrofitting, and business plans verified by an energy audit or assessment. Grain dryers, greenhouse energy curtains, lighting systems, and insulation projects are examples of many EEI projects, all of which have received funding across the U.S.

Potential applicants to the EEI have been advised not to wait until the deadline to complete the application. The process can be extensive.

Grants and loan guarantees may be combined to support projects. Loan guarantees may finance working capital or land purchases and are made only to lenders necessitating a second application. Regardless of source of financing, all must be documented as part of the application process.

External energy audits or assessments may also be required, depending upon the size of the proposal. Projects over $200,000 require a feasibility study.

Start planning by contacting the Michigan office USDA Rural Development at (517) 324-5157 to identify the area specialist for your business. The area specialist will provide the application materials and referral resources to aid in completing the process.

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