ESOPs and Worker Cooperatives Now Eligible for USDA Loan Guarantees

In Department of Agriculture Rural Business-Cooperative Services, 7 CFR Parts 4279 and 4287, the Department of Agriculture provided, for the first time, that loan guarantees may be made to ESOPs or worker cooperatives under the Business and Industry Guaranteed Loan Program. The maximum term is seven years. ESOP sellers cannot retain an interest more than five years. A rural area is "generally any area of a State other than a city or town that has a population of greater than 50,000 inhabitants and any urbanized area contiguous and adjacent to such a city or town." Guarantees are generally limited to $25 million.