Rural Business Development Grant Program

Assisting the development of small and emerging rural businesses

Small businesses are vital to growing and sustaining rural 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, Native American 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. Support is available in the form of either enterprise or opportunity grants.

Learn more about RBDG:

• Program Basics: Learn more about how this program works
• Eligibility: Find out who can utilize this program
• The Program in Action: Read success stories from those who have used this program
• How to Apply and Program Resources: Learn more about the application process and where to find more information
• Program History, Funding, and Farm Bill Changes: Learn about important policy changes and funding levels provided by the Farm Bill
• En español: Para más información de las programas de desarrollo rural, contacte la oficina del estado o visite la página web de RD

Program Basics

The Rural Business Development Grant Program is a federal grant program administered by state USDA Rural Development offices. Program grants fall under two categories: Enterprise Grants and Opportunity Grants.

Enterprise Grants support:

• 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.
• Rural transportation improvement.

Opportunity Grants support businesses:

• 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.
• 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.

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

Contact your local USDA Rural Development Office for more information on qualifying grant activities.

Eligibility

Rural entities that are 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, use this USDA eligibility tool.

The Program in Action

• Since launching in March 2015, RBDG has 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 (Pennsylvania) 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.
  • New England Farmers Union Education Foundation (Rhode Island and Connecticut) received $42,000 to support co-operative enterprise development in Connecticut and beginning farmer classes in Rhode Island.
  • Maine Organic Farmers & Gardeners Association (Maine) received $98,950 to establish an organic farm and business loan fund, provide technical assistance, and develop business and marketing workshops.
  • St. Lucie County Board of County Commissioners (Florida) received $97,000 for a feasibility study on connecting local, small farms and processors with commercial airlines.
  • Montgomery County Government (Tennessee) received $18,820 to purchase equipment for the county’s commercial kitchen.

  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: 

  • July 2015 RBDG Grantees
  • September 2015 RBDG Grantees
  • September 2016 RBDG Grants to Assist Tribal Communities

How to Apply and Program Resources

RBDG is administered by State USDA Rural Development Offices and applications are accepted once per year. To learn about application deadlines and local requirements, applicants should 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. Those already registered with these systems do not need to do it again.

For more information on RBDG and how to apply, please visit USDA Rural Business Development Grant Program and/or contact your State USDA Rural Development Office.

Program History, Funding, and Farm Bill Changes

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).

RBEG was created in the 1972 Consolidated Farm and Rural Development Act and RBOG was created in the 1996 Farm Bill. The 2014 Farm Bill authorized RBDG 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.

RBDG was reauthorized in the 2018 Farm Bill without changes.

As a discretionary program, the funding level for RBDG is determined each year by Congress through the annual agricultural appropriations process. Future funding cannot be projected because funding levels are determined one year at a time by Congress.

Rural Business Development Grant Program Annual Funding

For the most current information on program funding levels, please see NSAC’s Annual Appropriations Chart.

Authorizing Language

Section 6411 of the Agriculture Improvement Act of 2018 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 August 2019.