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Rural Business Opportunity Grants

Program Descriptions

Program Number



Rural Business Opportunity Grants


Federal Agency




Federal Agriculture Improvement and Reform Act of 1996, Section 741, Public Law 104-127.






To promote sustainable economic development in rural communities with exceptional needs.


Types of Assistance

Project Grants.


Uses and Use Restrictions

Grant funds may be used to assist in the economic development of rural areas by providing technical assistance, training, and planning for business and economic development.


Eligibility Requirements

Applicant Eligibility

Grants may be made to public bodies, nonprofit corporations, Indian tribes on Federal or State reservations or other Federally recognized tribal groups, and cooperatives with members that are primarily rural residents and that conduct activities for the mutual benefit of the members.

Beneficiary Eligibility

Rural communities and businesses in rural areas.


Evidence of legal capacity. Evidence of financial strength and expertise in activities such as proposed in the application, sufficient to ensure accomplishment of the activities and objectives described in the application.


Application and Award Process

Preapplication Coordination

This program is excluded from coverage under OMB Circular No. A-87.

Application Procedure

This program is subject to coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in the State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. This program is subject to environmental review requirements; however, most applications are expected to qualify as general exclusions.

Award Procedure

Potential applicants should file Standard Form 424.1, "Application for Federal Assistance (For Nonconstruction)," and additional material required by Agency regulations with the USDA Rural Development State Office. The application will include a written narrative and scope of work. More details are available from the Headquarters Office or any Rural Development State Office.


Applications will be given a priority score in accordance with the criteria set out in the program regulations.

Range of Approval/Disapproval Time



30 days to 1 year.



Assistance Considerations

Formula and Matching Requirements


Length and Time Phasing of Assistance

This program has no statutory formula or matching requirements, although availability of matching funds is considered in determining priority.


Post Assistance Requirements


Funding for complete projects is limited to projects that can be completed within 2 years. Projects of longer duration may only be funded for 1 year at a time. Grantees must provide a financial report and performance activity report quarterly while the project is in process, and a project evaluation report within 1 year after the project is completed.


In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.


Records and accounts must be maintained to reflect the operations of the project.


Financial Information

Account Identification



FY 07 $6,939,689; FY 08 $2,634,610; and FY 09 est $2,634,600.

Range and Average of Financial Assistance

$12,000 to $344,750. Average: $78,846.


Program Accomplishments

In fiscal year 2007, 107 grants were made. In FY 2008 the number of grants were 38. It is anticipated that in FY 2009, approximately the same number will be funded.


Regulations, Guidelines and Literature

Implementing regulations were published in the Federal Register (64 FR 71984) on December 23, 1999. The CFR citation is 7 CFR 4284, Subpart G.


Information Contacts

Regional or Local Office

Contact the appropriate Rural Development State Office listed in Appendix IV of the Catalog.

Headquarters Office

Rural Business-Cooperative Service, USDA, Specialty Lenders Division, STOP 3225, Room 6767, 1400 Independence Ave., S.W., Washington, DC 20250- 1521. Telephone: (202) 720-1400.

Web Site Address


Related Programs

10.769, Rural Business Enterprise Grants


Examples of Funded Projects

(1) a $50,000 grant was made to help fund a business incubator; (2) a $33,500 grant was made to a Native American tribe for technical assistance in implementing a business plan; (3) a $344,500 grant was made to provide technical assistance in an Enterprise Community.


Criteria for Selecting Proposals

Grant selection criteria include the extent to which economic development resulting from the proposed project will be sustainable over the long term; the extent to which the project should lead to improvements in the quality of economic activity within the community, such as higher wages, improved benefits, greater career potential, and the use of higher level skills; the amount of leveraging of funds from other sources; service to communities that are experiencing trauma due to a major natural disaster or the closing or major downsizing of a military facility or other major employer; service to communities that have remained consistently poor over the long term or have experienced long term population decline or job deterioration; and the extent of the project's usefulness as a best practice that may serve as a model for other communities.


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