April 22, 2014. Many of USDA’s financing programs involve the use of loans or loan guarantees to help rural businesses grow. However, a substantial number of small businesses are in need of equity support in lieu of, or in addition to, borrowed funds. This new fund will provide USDA the opportunity to introduce private equity investments in agriculture-related businesses.
The fund is being formed under the USDA's Rural Business Investment Program (RBIP). USDA utilizes RBIP to license funds to invest in enterprises that will create growth and job opportunities in rural areas, with an emphasis on smaller enterprises. Working through the USDA program enables licensed funds to raise capital from Farm Credit System banks and associations.
Advantage Capital Partners will manage this new fund. Additionally, partners from eight Farm Credit institutions have pledged to invest nearly $150 million into the new effort, including AgStar Financial Services (Mankato, Minn.); AgriBank (St. Paul, Minn.); Capital Farm Credit (Bryan, Texas); CoBank (Denver, Colo.); Farm Credit Bank of Texas (Austin, Texas); Farm Credit Services of America (Omaha, Neb.); Farm Credit Mid-America (Louisville, Ky.); and United Farm Credit Service (Willmar, Minn.).
Any entities interested in forming their own fund under the USDA’s RBIP have until July 29, 2014 to submit their application so that it will be reviewed in fiscal year 2014.