Rural Business Enterprise Grant Program

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The Rural Business Enterprise Grant (RBEG) Program is a U.S. federal grant initiative supporting small and emerging private businesses in rural areas by funding technical assistance, infrastructure, and business development activities.
What are the main aims and objectives?

The program aims to stimulate rural economic growth and job creation by supporting the startup, expansion, and sustainability of small and emerging private businesses in underserved rural communities. Its objectives include promoting entrepreneurial capacity and infrastructure, facilitating business training and technical assistance, improving access to capital, and fostering equity through prioritized funding to tribal and disadvantaged populations. The overarching goal is to strengthen rural economies by creating sustainable employment opportunities and reducing economic disparities.

How does the program work?

Administered by the U.S. Department of Agriculture’s Rural Development agency, the RBEG program provides competitive grants exclusively to eligible public bodies, nonprofit corporations, federally recognized Indian Tribes, and rural cooperatives, not directly to individual businesses. Projects funded must benefit small emerging businesses (generally firms with fewer than 50 employees and under $1 million in annual revenue) located in rural areas outside urban centers of 50,000 or more. The program offers two types of grants: Enterprise Grants that finance business development activities such as technical assistance, training, equipment, infrastructure improvements, and revolving loan funds for startups and expansions; and Opportunity Grants, limited to 10% of total funds, that support broader rural economic development plans, incubators, and infrastructure. Applicants submit proposals through USDA state and local offices on a competitive basis, evaluated primarily on potential job creation, economic need, and alignment with rural strategic plans. Funded projects implement training, business incubation, capital infrastructure, pollution control, and community economic initiatives to bolster rural entrepreneurship and resilience. Cost-sharing is not mandatory but favored. Grants typically range up to $500,000, directed at broadbanding opportunity for rural economic development ecosystems.

The program offers two types of grants: 

1. Enterprise grants must be used on projects to benefit small and emerging businesses in rural areas as specified in the grant application. Uses may include:

  • Training and technical assistance, such as project planning, business counseling and training, market research, feasibility studies, professional or/technical reports or producer service improvements.
  • Acquisition or development of land, easements, or rights of way; construction, conversion, renovation of buildings; plants, machinery, equipment, access for streets and roads; parking areas and utilities.
  • Pollution control and abatement.
  • The capitalization of revolving loan funds, including funds that will make loans for start-ups and working capital.
  • Distance adult learning for job training and advancement.
  • Rural transportation improvement.
  • Community economic development.
  • Technology-based economic development.
  • Feasibility studies and business plans.
  • Leadership and entrepreneur training.
  • Rural business incubators.
  • Long-term business strategic planning.

2. Opportunity grants can be used for:

  • Community economic development.
  • Technology-based economic development.
  • Feasibility studies and business plans.
  • Leadership and entrepreneur training.
  • Rural business incubators.
  • Long-term business strategic planning.
What is the overall cost?

The program is authorized under the Consolidated Farm and Rural Development Act with an annual funding ceiling of $65 million (USD 65 million), typically appropriated by Congress each fiscal year. Historic appropriations before consolidation averaged around $26-34 million annually, but since the 2014 Farm Bill, Congress authorized $65 million annually through 2018 and beyond, though actual appropriations may fluctuate.

How was it implemented?

The RBEG program was originally authorized in 1972 under Section 310B(c) of the Consolidated Farm and Rural Development Act to address the lack of access to capital and technical support for small businesses in rural U.S. communities. It operated alongside the Rural Business Opportunity Grant program until the Agricultural Act of 2014 (the 2014 Farm Bill) consolidated the two into the current Rural Business Development Grant (RBDG) program to streamline administration and enhance program efficiency while preserving distinct enterprise and opportunity grant functions. The USDA administers the program through its Rural Development state and local offices, which conduct competitive application reviews based on statutory criteria. Implementation includes the disbursement of grants supporting business technical assistance, infrastructure development, workforce training, and pollution control projects. The program encourages leveraging non-federal capital and integrates with regional and local economic development efforts to optimize rural impact. Ongoing USDA oversight ensures alignment with rural economic goals and compliance with grant conditions.

What impact has been measured?

There is no available information about the impact of this program. 

What lessons can be learned?
  • The program’s competitive grant model may inadvertently favor applicants with greater proposal writing capacity, potentially disadvantaging the most resource-limited rural communities.
  • Funding amounts often address early-stage needs but may be insufficient for larger-scale rural development initiatives requiring higher capital investments.
  • There is limited centralized, comprehensive data on long-term business survival, job quality, and economic changes resulting from the program nationwide.
  • Opportunity Grant allocations are capped at 10% of total appropriations, possibly constraining broader economic planning and ecosystem development efforts.
  • The absence of direct grants to for-profit entities limits immediate capital access for rural entrepreneurs, necessitating intermediary organizations which may not be present in all regions.
  • Administrative and reporting burdens might limit participation by smaller nonprofits or local bodies with constrained resources.
  • Greater inclusion-focused strategies could improve access among underrepresented rural populations to expand program equity.
  • Future iterations could benefit from standardized data collection and independent evaluations to better document efficacy and inform continuous improvement.

CURATED BY

Cristina Fernandez

Director for Knowledge + Programming
Global Entrepreneurship Network
United States