The USDA Rural Development office administers some of the most substantial federal grant and loan programs available to Texas businesses outside major metro areas. Texas has more rural land and rural communities than any other state, meaning a large number of Texas businesses may be eligible for USDA programs that many business owners overlook.
This guide covers the key USDA rural business programs available in Texas, eligibility criteria based on published guidelines, and how to determine whether your business location qualifies.
What Counts as "Rural" for USDA Programs?
USDA defines eligible rural areas as communities with populations of 50,000 or less that are not part of an urbanized area adjacent to a city with a population above 200,000. This definition is broader than many people expect — many Texas communities that do not feel "rural" still meet the USDA population threshold.
The USDA maintains an online eligibility map where you can check whether a specific address is in an eligible rural area. Checking the map is the first step before pursuing any USDA rural program.
Key USDA Programs for Texas Businesses
Rural Business Development Grants (RBDG)
RBDG grants support small and emerging businesses in rural areas. The grants are awarded to rural public entities, nonprofits, and tribes, which then use the funds to support local businesses. Activities that RBDG can fund include:
- Technical assistance and business planning
- Training and capacity building for rural entrepreneurs
- Business incubators and co-working space development
- Revolving loan funds for local business lending
- Feasibility studies for new business ventures
While individual businesses do not apply directly for RBDG, they can benefit by connecting with local organizations that receive these grants.
Rural Energy for America Program (REAP)
REAP provides grants and loan guarantees for energy efficiency improvements and renewable energy installations for rural small businesses and agricultural producers. This is one of the most accessible USDA programs for individual businesses:
- Grants: Up to 50% of eligible project costs for renewable energy systems or energy efficiency improvements
- Loan guarantees: Up to 75% of eligible project costs
- Combined grant and loan guarantee: Up to 75% of eligible costs
- Eligible projects: Solar panels, wind turbines, geothermal systems, biomass, energy-efficient equipment upgrades, insulation, HVAC improvements, and lighting retrofits
Business and Industry (B&I) Loan Guarantees
The B&I program provides loan guarantees of up to 80% for loans to businesses in rural areas. This is the USDA's largest rural business lending program:
- Maximum loan: $25 million (in some cases higher)
- Eligible uses: Business acquisition, expansion, equipment, working capital, real estate, and refinancing
- Key advantage: Larger loan amounts and longer terms than many SBA programs
Intermediary Relending Program (IRP)
IRP provides low-interest loans to intermediary lenders (such as CDFIs and rural lending organizations) who then relend to businesses and communities in rural areas. Texas businesses can access IRP funds through participating intermediary lenders.
Rural Microentrepreneur Assistance Program
This program provides microloans (up to $50,000) and technical assistance to rural microenterprises — businesses with 10 or fewer employees. The program is administered through microenterprise development organizations that serve rural Texas.
USDA Programs for Rural Communities
Several USDA programs benefit businesses indirectly by improving rural community infrastructure:
- Community Facilities Grants: Fund essential community facilities like healthcare clinics, public safety buildings, and community centers.
- Water and Environmental Programs: Fund water and wastewater infrastructure that supports business operations.
- Rural Broadband: Programs expanding broadband access in rural areas, critical for modern business operations.
Layering USDA with Other Programs
Rural Texas businesses can layer USDA programs with other state and federal resources:
- Texas Capital Fund: State infrastructure grants administered through TDA for rural communities. Rural business grants overview.
- SBA Programs: SBA 7(a), 504, and microloans can complement USDA financing. SBA 7(a) guide.
- Texas HUB Certification: State procurement preferences for qualifying businesses. HUB program guide.
- Skills Development Fund: Workforce training grants available statewide. Skills Development Fund guide.
How to Get Started
- Check USDA eligibility maps: Verify your business location qualifies as a USDA-eligible rural area.
- Contact USDA Rural Development Texas: The state office in Temple and area offices across Texas can explain program details and application requirements.
- Explore REAP: If you are considering energy improvements, REAP is one of the most accessible USDA programs.
- Connect with your SBDC: Rural SBDCs can help identify and apply for USDA programs.
Find Programs That May Fit Your Business
USDA programs are often overlooked by rural Texas businesses. Combining USDA programs with state and other federal resources can create a strong support package.
Not sure which programs may fit your business? Our free screening report checks your business against 150+ verified programs — grants, tax credits, loans, and incentives — and shows you which ones may match. Start your free screening →