Getting Money to Survive and Thrive – Federal Programs and Resources Available to Support the Bioeconomy

April 20, 2020 |

Commercial Scale Development

There are Federal Programs that support innovative new technologies that have been successfully tested/operated at a demonstration scale and documentation (technical, market, socio-economic, environmental, and financial feasibility) and are ready for the commercial scale development. Other Federal Programs support commercial technologies that have already been proven at a commercial scale.

These Federal Programs depending on the type of technology /concept can provide financial assistance in the form of grants, loans and loan guarantees, or combinations.

USDA Biofuels, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (Section 9003)

This program provides loan guarantees up to $250 million to assist in the development, construction and retrofitting of new and emerging technologies. These technologies must support one or a combination of the following:

  • advanced biofuels,
  • renewable chemicals
  • biobased products.

More information here.

Project Eligibility Requirements:

– The project must be located in a state

– The total amount of federal participation (loan guarantee, plus other federal funding) must not    exceed 80 percent of the total eligible project costs

– The borrower and other principals involved in the project must make a significant cash equity contribution

Definitions of Eligible Purposes:

  • Biobased product manufacturing — The use of Technologically New Commercial-Scale processing and manufacturing equipment and required facilities to convert Renewable Chemicals and other biobased outputs of Biorefineries into end-user products on a Commercial Scale
  • Biorefinery — A facility (including equipment and processes) that converts Renewable Biomass into Biofuels and Biobased Products and may produce electricity
  • Renewable chemical — A monomer, polymer, plastic, formulated product, or chemical substance produced from Renewable Biomass.
  • Advanced biofuel–   Fuel derived from Renewable Biomass, other than corn kernel starch.

Application Process:  A two-phase application process is used.  Phase I application requires sufficient information to be provided from the project owner and the lender of record for USDA to determine that the proposed project meets the eligibility provisions of the program.  Phase II application contains the information for USDA to determine if the project merits the issuance of a loan guarantee to the lender of record.

Application Deadlines for Phase I applications:  Deadlines are 4:30 p.m. Eastern Daylight Savings Time on October 1 and April 1 of each year. Funding availability is announced annually through a Federal Register notice.

USDA Rural Energy For America Program (REAP)

REAP provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements.

More information here.

Eligible areas:

  • Businesses must be in a rural area – an area other than a city or town with a population of greater than 50,000 inhabitants or the urbanized area of that city or town.
  • Agricultural producers may be in rural or non-rural areas.

Funds may be used for renewable energy systems including Biomass conversion facilities including biodiesel and ethanol, anaerobic digesters, and solid fuels.


  • Agricultural Producer. An individual or entity directly engaged in the production of agricultural products, including crops (including farming); livestock (including ranching); forestry products; hydroponics; nursery stock; or aquaculture, whereby 50 percent or greater of their gross income is derived from those products.
  • Rural Small Business. A Small Business that is located in a Rural Area or that can demonstrate the proposed project for which assistance is being applied for under this subpart is located in a Rural Area.

Funding limitations:

  • Loan guarantees on loans up to 75% of total eligible project costs

    Grants for up to 25% of total eligible project costs

    Combined grant and loan guarantee funding up to 75% of total eligible project costs

  $5,000 minimum loan amount

    $25 million maximum loan amount

    Renewable Energy System Grants: $2,500 minimum; $500,000 maximum

Funding Availability:  Funding windows for grant applications and loan guarantee applications is published annually in the Federal Register as a Notice of Solicitation of Applications.

USDA Business and Industry (B&I) Program

B&I program offers loan guarantees to rural businesses for a variety of loan purposes including commercially proven renewable energy development businesses.   The business must be located in a rural area to be eligible. Rural areas include areas outside of a city or town with a population of fewer than 50,000 people.

More information here.

Eligible Recipients:

  • For-profit businesses
  • Nonprofits
  • Cooperatives
  • Federally-recognized Tribes
  • Public bodies

Funding Limitations: Maximum Loan Guarantee Amount cannot exceed $25 million

Funding Availability:  Funds are available year-round.  Applications can be submitted throughout the year

DOE Title XVII Loan Program for Renewable Energy and Energy Efficiency (REEE)

The U.S. Department of Energy (DOE) supports the commercial development of innovative clean energy technologies.  Key technology areas of interest include advanced grid integration and storage, drop-in biofuels, waste-to-energy, and/or efficiency improvements.

More information here.

A project must meet all of the following requirements to be eligible for a Title XVII loan guarantee:

  • Meet “Eligible Project” requirements as defined by an open solicitation in one or more of the technology areas described therein
  • Employ new or significantly improved technology as compared to commercial technology in service in the United States at the time the guarantee is issued
  • Avoid, reduce, or sequester anthropogenic emissions of greenhouse gases
  • Be located in the United States. Foreign ownership or sponsorship of the projects is permissible as long as the project is located in one of the fifty states, the District of Columbia, or a U.S. territory
  • Provide a reasonable prospect of repayment

Funding Availability:  There is $4.5 billion of loan authority available.  See funding solicitation for details on funding windows and application procedures.

More information here.

Small Business Administration 7A Program

SBA 7A Program offers loan guarantees to small businesses for a variety of loan purposes including commercially proven renewable energy development businesses.

More information here.

To be eligible, the business must qualify as a small business in accordance with the Table of Size Standards: More information here.

Maximum loan amount: $5 million

Funding Availability:  Funds are available year-round.  Applications can be submitted throughout the year.

About the Author:  Bill Hagy is a member of Lee Enterprises Consulting, a premier bioeconomy consulting group, with more than 100 consultants and experts worldwide.  Bill has a degree in Agriculture Engineering from Virginia Tech.  He retired from the United States Department of Agriculture’s Rural Development after 37.5 years.  During his three decades years at the US Department of Agriculture, he progressed from Assistant County Supervisor administrating loans, loan guarantees, and grant programs to serving as Acting Under Secretary for Rural Development and spent his final three years as the Special Assistant for Renewable Energy to Former United States Secretary of Agriculture Tom Vilsack  advising on policy matters relating to alternative/renewable energy development. Any opinions expressed herein are those of the author, and do not necessarily express the views of Lee Enterprises Consulting. 9851 Brockington Road, Suite 4, Sherwood, AR  72120 USA.  +1 (501) 833-85111

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