Check The S.O.P.: Q & A

Q – What does SBA use to define “rural” projects that are eligible for increased loan amounts?

A - The SBA is currently using the Department of Agriculture's definition of "rural" in defining the areas which are deemed to be “rural” for the 504 loan program. In the future, any time the Department of Agriculture chooses to change the definition of "rural," SBA will adopt the new definition as well.

13 CFR. Section 120.10 Definitions. Rural Area is a political subdivision or unincorporated area in a non-metropolitan county (as defined by the Department of Agriculture), or, if in a metropolitan county, any such subdivision or area with a resident population under 20,000 which is designated by SBA as Rural.

The definition of “rural” has two important ramifications for CDC’s. First, a project which is directed towards one of nine public policy goals is authorized a higher maximum debenture funding ($2.0 million instead of the $1.5 million allowed for regular debentures) and individual rural projects need not meet the individual jobs test