The U.S. Department of Agriculture’s Rural Development programs represent one of the most significant federal funding sources for Texas businesses located in rural communities. With over 170 counties in Texas classified as rural or partially rural, a large number of Texas businesses are eligible for USDA programs that provide grants, loans, loan guarantees, and technical assistance. This guide covers the key USDA Rural Development programs available to Texas businesses in 2026.
USDA Business & Industry Loan Guarantees
The Business & Industry (B&I) Loan Guarantee program is the largest USDA business lending program. It provides loan guarantees of up to 80 percent to lenders making loans to rural businesses. Loans can be used for working capital, equipment, real estate, and debt refinancing. Maximum loan amounts can reach $25 million, making this program suitable for substantial rural business projects. Complete USDA rural business guide.
Rural Energy for America Program (REAP)
REAP provides grants and loan guarantees for rural small businesses and agricultural producers to purchase and install renewable energy systems or make energy efficiency improvements. Grants can cover up to 40 percent of eligible project costs, with combined grant and loan guarantee funding of up to 75 percent. Solar panels, energy-efficient HVAC systems, lighting upgrades, and insulation are commonly funded projects. REAP guide for Texas businesses.
Value-Added Producer Grants
VAPG provides competitive grants to agricultural producers who add value to their raw commodities. Eligible activities include processing, packaging, marketing, and distribution of value-added products. Planning grants of up to $75,000 and working capital grants of up to $250,000 are available. VAPG guide for Texas producers.
Rural Business Development Grants
RBDG provides grants for projects that benefit small and emerging rural businesses. Funds can be used for training, technical assistance, acquisition of equipment for community economic development, and revolving loan funds. These grants are available to towns, communities, state agencies, universities, nonprofits, and federally recognized tribes in rural areas.
Rural Microentrepreneur Assistance Program
This program provides loans, grants, and technical assistance to Microenterprise Development Organizations that serve rural microentrepreneurs. Microentrepreneurs are defined as businesses with 10 or fewer employees. The program supports very small businesses in rural Texas communities that may not qualify for conventional lending.
2026 Program Updates
- REAP funding: REAP continues to receive strong federal funding, with application windows typically opening in the first quarter of each fiscal year. Check the USDA Rural Development Texas office for current deadlines.
- B&I program: The B&I program operates on a continuous basis, accepting applications year-round through approved lenders.
- Rural eligibility: USDA uses its own eligibility maps to determine which areas qualify as rural. Some areas that appear suburban may still qualify. Check eligibility at eligibility.sc.egov.usda.gov.
- Infrastructure Act funding: Additional USDA programs funded by the Infrastructure Investment and Jobs Act continue to deploy capital for broadband, water, and electric infrastructure in rural Texas.
How to Determine Rural Eligibility
- Visit the USDA eligibility website and enter your business address
- Check whether your location falls within an eligible rural area for each specific program
- Contact the USDA Rural Development Texas state office in Temple for guidance on borderline areas
Related Programs
- USDA EQIP for Texas ranchers
- USDA FSA loans for Texas farmers
- Rural business grants overview
- SBA 7(a) loans — available in both rural and urban areas
Find Your Rural Business Match
USDA programs are among the best-funded federal resources for rural Texas businesses. Our screening report identifies which USDA, SBA, state, and local programs match your rural business. Start your free screening →