Rural Business Development Grant Program

Important Update:

Please note that the Grassroots Guide has not yet been updated to reflect changes made by the 2018 Farm Bill, which was passed and signed into law in December 2018. We are in the process of updating the Guide and expect to publish an updated version in the spring of 2019. In the meantime, please use this guide for basic information about programs and important resources and links for more information, but check with USDA for any relevant program changes made by the 2018 Farm Bill. Also, check out our blog series covering highlights from the new farm bill. 

Assisting the development of small and emerging

rural businesses

Small rural businesses are vital to growing and sustaining rural jobs and economies, but starting and growing them isn’t easy.  The Rural Business Development Grant Program (RBDG) supports the development and growth of rural small and emerging businesses with fewer than 50 employees and less than $1 million in gross revenues.  The program awards grants on a competitive basis to towns and other governmental entities, Indian tribes, rural cooperatives, higher education institutions, and nonprofit organizations for planning, technical assistance, job training, and acquisition of land, capital, equipment and other business development needs.  Grants are available as either enterprise or opportunity type grants.

Program Basics

RBDG was created in the 2014 Farm Bill by consolidating two previous rural business development programs, the Rural Business Opportunity Grant Program (RBOG) and the Rural Business Enterprise Grant Program (RBEG).  The program is administered by State USDA Rural Development offices and grant uses fall under two categories:

1. Enterprise grants for:

  • Training and technical assistance, such as project planning, business counseling/training, market research, feasibility studies, reports, product/service improvements;
  • Acquisition or development of land, easements, and rights of way;
  • Construction, conversion, or repairs of buildings, equipment, and utilities;
  • Capitalization of revolving loan funds, including funds that will make loans for start-ups and working capital;
  • Distance learning for job training and development; and
  • Rural transportation improvement.

2. Opportunity grants that:

  • Identify and analyze business opportunities;
  • Identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and managers;
  • Assist in the establishment of new rural businesses and the maintenance of existing businesses, including through business support centers;
  • Conduct regional, community, and local economic development planning and coordination, and leadership development; and
  • Establish centers for training, technology, and trade that will provide training to rural businesses in the use of interactive communications technologies to develop international trade opportunities and markets.

For each fiscal year, not more than 10 percent of RBDG funds are to be made available to the opportunity category of projects. 

As these are just a sampling of the types of activities that may be funded, contact your local USDA Rural Development Office for more information on qualifying grant activities.

Rural entities eligible to receive funding through RBDG include, but are not limited to:

  • Towns
  • Communities
  • Indian tribes
  • State agencies
  • Authorities
  • Nonprofit organizations
  • Institutions of higher education
  • Rural cooperatives

RBDG project funds must benefit rural areas or towns outside urbanized areas on the periphery of any city with a population of 50,000 or more.  To check if your area is eligible, check this USDA eligibility mapping tool.

The Program in Action

Since launching in March 2015, RBDG program grants have been used to provide technical assistance and training to farmers and other small business owners, start revolving loan funds, and spur new business opportunities in rural communities. Examples of funded projects made possible through RBDG include:

  • Republic Food Enterprise Center (RFEC) (Pennsylvania): which received $91,576 to convert 5,000 square feet of warehouse space into an energy-efficient cool room to allow for the storage and processing of fruits and vegetables.

Read more about how RBDG has helped provide new and increased marketing opportunities for farmers and other small business owners, spurred rural economic development, and provided consumers with more food choices: 

How to Apply and Program Resources

The program is administered by State USDA Rural Development Offices and applications are accepted once per year.  To learn about application deadlines and any local requirements, applicants need to contact their State USDA Rural Development Office.

Applicants must pre-register with the System for Award Management (SAM) and obtain a Data Universal Number System (DUNS) number.  Applicants are advised to apply early for these no-cost requirements as they can take considerable time.  Applicants already registered with these systems do not need to do it again.

There is no maximum grant amount for enterprise type grants; however, smaller requests are given higher priority.  Generally, grants range from $10,000 up to $500,000.  There is no cost sharing requirement. Opportunity type grant funding is limited to a maximum award of $50,000 for unreserved funds.  Total opportunity type grant funding is limited statutorily to up to 10% of the total RBDG annual funding.

For more information on RBDG and how to apply, please see:

USDA Rural Business Development Grant Program and contact your State USDA Rural Development Office.

Program History, Funding, and Farm Bill Changes

RBDG was created in the 2014 Farm Bill and replaces two previous grant programs – Rural Business Enterprise Grants (RBEG) and Rural Business Opportunity Grants (RBOG). RBEG was created in the 1972 Consolidated Farm and Rural Development Act and RBOG was created in the 1996 Farm Bill.

Under the 2014 Farm Bill, RBDG was authorized to receive up to $65 million in discretionary funding per year over five years.  The bill limits the use of funds for certain activities previously funded by RBOG, allowing up to 10 percent of total appropriated dollars to be used for planning projects, technical assistance and training to existing or prospective entrepreneurs and managers, localized economic development planning, and certain business training centers.

As a discretionary program, the funding level for RBDG will be determined each year by Congress in the annual agricultural appropriations bill. The chart below shows what the two predecessor programs received in recent years. Future funding cannot be projected because funding levels will be determined one year at a time by Congress.

Rural Business Development Grant Program Annual Funding

Fiscal Year Total Funding Available (in millions)
2013 $24.7 (RBEG+RBOG)
2014 $26.6 (RBEG+RBOG)
2015 $24.0
2016 $24.0
2017  $24.0

Authorizing Language

Section 6012 of the Agricultural Act of 2014 amends Section 310B of the Consolidated Farm and Rural Development Act of 1989, to be codified at 7 U.S.C. Section 1932(c).

Last Updated October 2016.