Through the Rural Economic Development Loans and Grants (REDL&G) program, the USDA makes loans and grants to Midwest Energy and other electric and telephone cooperatives. The cooperatives then pass the federal funds through to eligible rural projects. 

To the ultimate recipient, there is no difference between a REDL&G loan and grant. In both cases, the ultimate recipient receives a low-interest loan with a term up to 10 years. 

The federal dollars are interest free, and Midwest Energy is allowed to charge one percent interest to cover administrative costs. Midwest Energy and the USDA require security for all loans so that customers and taxpayers will not be burdened by defaults. 

The primary difference between a grant and a loan is the destination of the funds upon repayment. When an ultimate recipient repays a loan, the dollars return to the federal government. When the ultimate recipient repays a grant, the dollars are retained by Midwest Energy, placed in a revolving loan fund and then reused to make loans to assist additional projects in the region.

The REDL&G program attracts new industrial and commercial customers, expands existing businesses, builds demand for locally produced commodities, improves the economy and enhances the quality of life in the community.

The REDL&G program is not a substitute for your local bank. It can, however, provide extra funds to leverage local resources. Borrowers will be required to submit a business plan and other information.

To learn more about REDL&G, contact Justin at 1-800-222-3121.