Federal Economic Development Resources for Food Businesses and Systems: In Brief

January 13, 2023 R47387

Federal Economic Development Resources for
Food Businesses and Systems: In Brief
January 13, 2023
Congressional Research Service
https://crsreports.congress.gov
R47387

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Federal Economic Development Resources for Food Businesses and Systems: In Brief

Introduction
Community initiatives to improve local and regional food systems often focus on efforts to
increase the consumption, production, distribution, and development of products within a
particular geographic area. The networks associated with the agricultural and food supply chain
are also considered integral to the concept of local and regional food systems.1 However,
definitions of the term “local food systems” varies, and the distance that qualifies as “local” also
varies.2 State and local government agencies and outside groups may provide other definitions for
these terms. Food system initiatives may be designed to address one or more objectives related to
food access, sustainability, entrepreneurship, or regional economic diversification, among others.
In recent decades, Congress has authorized several programs that may be used to support food
systems initiatives. In 2022, the Biden Administration’s National Strategy on Hunger, Nutrition
and Health outlined ways that the federal government and other entities may partner to address
food insecurity and nutrition-related health issues. The Administration’s report directed several
federal agencies to enhance the connection between economic development programs and healthy
food access initiatives, among other recommendations.3
This report focuses on economic and business development programs administered by the
Departments of Commerce, Health and Human Services, and Housing and Urban Development;
the U.S. Treasury; the Small Business Administration; and federal regional commissions and
authorities that may be used to support food systems initiatives. Although most of these programs
do not focus specifically on food access or nutrition activities, many are flexible and broad-based,
and can be used generally to fund activities that increase an area’s level of private investment,
jobs, workforce capacity, or economic opportunity. These programs provide assistance in two
ways: (1) the programs may fund community-level strategies to strengthen the supply and
demand factors relevant to regional food economies and (2) the programs may assist individual
food businesses with credit or technical assistance.4 This report does not include U.S. Department
of Agriculture (USDA) programs discussed in CRS Report R46538, Local and Urban Food
Systems: Selected Farm Bill and Other Federal Programs.5

1 U.S. Department of Agriculture (USDA), “Definitions: Sustainability and Food Systems,” https://www.usda.gov/oce/
sustainability/definitions; and Andrew Dumont et al., eds., Harvesting opportunity: The power of regional food system
investments to transform communities, Federal Reserve Bank of St. Louis and the Board of Governors of the Federal
Reserve System, 2017, p. 18, https://www.stlouisfed.org/-/media/project/frbstl/stlouisfed/files/pdfs/community-
development/harvesting-opportunity/harvesting_opportunity.pdf. For a summary of related terms, see CRS Report
R46538, Local and Urban Food Systems: Selected Farm Bill and Other Federal Programs.
2 USDA Economic Research Service, Local Food Systems: Concepts, Impacts, and Issues, Stephen Martinez,
Economic Research Report (ERR) No. 97, May 2010, pp. 42-45, https://www.ers.usda.gov/publications/pub-details/?
pubid=46395.
3 The White House, “Biden-Harris Administration National Strategy on Hunger, Nutrition, and Health,” September
2022, https://www.whitehouse.gov/wp-content/uploads/2022/09/White-House-National-Strategy-on-Hunger-Nutrition-
and-Health-FINAL.pdf.
4 A description of regional and local strategies is beyond the scope of this report. For examples of such strategies and
related policies, see CRS Report R44390, The Role of Local and Regional Food Systems in U.S. Farm Policy, by Renée
Johnson.
5 The most recent farm bill was enacted in 2018 (Agriculture Improvement Act of 2018 (P.L. 115-334)). For more
background, see CRS Report R45525, The 2018 Farm Bill (P.L. 115-334): Summary and Side-by-Side Comparison.
Other related USDA nutrition programs may exist, such as those last reauthorized in the Healthy, Hunger-Free Kids
Act of 2010 (P.L. 111-296). For more background, see CRS In Focus IF10266, Child Nutrition Reauthorization (CNR):
An Overview.
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

Linking Economic Development and Food Systems
Food systems initiatives are designed to address multiple, interrelated objectives often centered
on food system sustainability or community health goals (such as improved food access and food
security). Some communities may also develop food systems initiatives as a component of a
broader economic development, entrepreneurship, workforce, and regional diversification
strategy.7 These communities may develop food systems initiatives with the view that such efforts
may contribute to increased employment and income growth.8 The development of local or
regional food systems is based on the premise that stimulating the supply of and demand for
locally grown or produced goods recirculates spending by small and medium-sized businesses
and local consumers in the local community,
and may contribute to local economic
Economic Development
resiliency.9 Additionally, the promotion of
The term “economic development” lacks a common
local food and food businesses may align with
definition and can refer both to a policy objective as
well as a set of tools to achieve that objective. The
business recruitment, tourism, and place-
Department of Commerce’s Economic Development
making strategies designed to attract new
Administration (EDA), describes economic
firms, visitors, and residents. For instance, a
development as creating
region with a particularly unique or active
the conditions for economic growth and improved
local food economy may promote its food and
quality of life by expanding the capacity of
agriculture assets in order to generate
individuals, firms, and communities to maximize
the use of their talents and skil s to support
spending and revenue.10
innovation, lower transaction costs, and
Policymakers and practitioners may have
responsibly produce and trade valuable goods and
services.6
additional reasons for supporting the
Economic development is also described as a long-term
development of local and regional food
process designed to create jobs and economic activity,
systems.11 For instance, some view enhanced
and as efforts to address equity and create wealth.
regional collaboration on food systems as
Economic development policy goals may range from
potentially beneficial to aspects of food supply
increased economic activity (e.g., growth) to equity or
chains and food system resilience.
improved socioeconomic conditions (e.g., decreased
12 Food
disparities).
systems projects may also be designed to

6 EDA, “Key Definitions,” https://www.eda.gov/performance/key-definitions/.
7 For examples, see Emily Robbins, Food-Based Business Incubator Programs, National League of Cities, 2016,
https://www.nlc.org/wp-content/uploads/2020/09/Food-Based_Business_Incubator_Programs.pdf.
8 Researchers report mixed findings on the local economic development impact of local food systems. Researchers note
that the size and scale of the overall economic impact of food system investments is difficult to measure and evaluate
because of the possibility that these activities displace others, among other considerations. See Andrew Dumont et al.,
eds., 2017, and USDA ERS, ERR-97, May 2010.
9 Andrew Dumont et al., eds., 2017. Resiliency typically refers to the ability of regional economies and businesses to
withstand shocks. Shocks may include national or global economic downturns; regional industry downturns; or external
events, such as a natural or man-made disaster. See U.S. Economic Development Administration (EDA), “CEDS
Guidelines—Economic Resilience,” https://www.eda.gov/ceds/content/economic-resilience.htm.
10 Dave Shideler and Philip Watson, “Making Change through Local Food Production: Calculating the Economic
Impact of Your Local Food Project,” Journal of Agriculture, Food Systems, and Community Development, January
2019, Vol. 8, Suppl. 3, p. 174, https://doi.org/10.5304/jafscd.2019.08C.011.
11 Andrew Dumont et al., eds., 2017, and USDA ERS, ERR-97, May 2010.
12 The field of food system resilience is considered nascent by some researchers. For additional information, see John
Hopkins Center for a Livable Future, “Resilience Planning Guide,” https://clf.jhsph.edu/projects/food-system-
resilience/resilience-planning-guide.
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support communities’ land use and development plans or to recognize cultural assets.13
Overview of Federal Economic and Business
Development Programs
Congress has authorized multiple agencies to administer flexible economic and business
development programs that may be used to strengthen aspects of local and regional food
systems.14 These programs may not specifically focus on community health, food security, and
food access, but they could be used to address the development of food systems and food
businesses more generally.
Project eligibility for federal economic development programs depends on community conditions,
and the type of activity and applicant, among other criteria. Many of the programs outlined in this
report use criteria to prioritize projects that impact low- or moderate-income households (e.g.,
HUD’s Community Development Block Grant program) or economically distressed areas (e.g.,
the EDA’s Public Works and Economic Adjustment Assistance programs).15 Grants, cooperative
agreements, and federal technical assistance are generally available to units of local government,
states, educational institutions, nonprofit organizations, Indian tribes, and non-business entities.
Businesses may be eligible for certain cooperative agreements or credit, technical assistance, and
business coaching services, but are not typically eligible for economic development grants.
For Non-Business Entities: Select Grant and Loan
Guarantee Programs
The following grant and loan guarantee programs are generally available to non-business
stakeholders and may support community-level strategies to strengthen the supply and demand
factors relevant to regional food economies. For example, community-level projects may be
designed to construct shared production facilities, increase access to local foods, address barriers
to entrepreneurship, strengthen regional branding and marketing efforts, or provide workforce
training. The grant, tax incentive, and credit and technical assistance programs described below
and in Table 1 should be considered illustrative and not comprehensive.
U.S. Department of Commerce, Economic Development
Administration (EDA) Grant Programs16
The EDA administers a number of funding and technical assistance programs for communities
seeking to expand local economic opportunities, some of which may be used by communities to

13 CDFA Food Systems Finance Best Practices Guidebook, Community Development Finance Association, December
2022, https://www.cdfa.net/cdfa/cdfaweb.nsf/resourcecenters/foodsystems.html.
14 For a directory of federal economic and business development resources, see CRS Report R46683, Federal
Resources for State and Local Economic Development, by Julie M. Lawhorn.
15 Federal regional commissions and authorities only provide assistance to projects in their designated regions.
16 For more information, see CRS Report R46991, Economic Development Administration: An Overview of Programs
and Appropriations (FY2011-FY2022), by Julie M. Lawhorn. A full list of EDA programs is available at
https://eda.gov/programs/eda-programs/, and the current Notice of Funding Opportunities are available at
https://eda.gov/funding-opportunities/. Interested grant applicants are encouraged to contact economic development
districts (https://eda.gov/edd) or state or regional EDA representatives (https://www.eda.gov/contact).
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

develop food systems and entrepreneurial activity in food sectors. The Local Technical
Assistance, Public Works, Economic Adjustment Assistance (EAA), University Center, and other
EDA programs could be used to support regional efforts to strengthen food systems and food
businesses. For example, EDA’s EAA program may be used for facility construction or repair,
feasibility studies, business technical assistance, workforce training, revolving loan funds, and
incubator programs. Eligible applicants for most EDA programs include EDA-designated
economic development districts (EDDs); Indian tribes; states, counties, cities, or other political
subdivisions of a state; institutions of higher education; and nonprofit organizations. EDA does
not make grants to for-profit entities or individuals.
Federal Regional Commissions and Authorities Grant Programs17
Federal regional commissions and authorities, including the Appalachian Regional Commission
(ARC), Delta Regional Authority (DRA), Denali Commission, Northern Border Regional
Commission (NBRC), and Southeast Crescent Regional Commission (SCRC) provide assistance
to congressionally designated counties in their service areas for economic development
initiatives. Grants from the federal regional commissions and authorities may support activities
similar to those funded by EDA programs, such as the repair or construction of shared food
production facilities, equipment for an incubator program, or feasibility studies to evaluate the
capacity of food producers to reach new markets.
Federal regional commissions may also publish research on regional food systems’ challenges
and opportunities. For example, in 2022, the ARC published a report that analyzed opportunities
to strengthen the region’s local food economies. The report identified opportunities to promote
food businesses through the development of a place-specific, regional brand. The report also
identified opportunities for training farmers, increasing land access for aspiring farmers, and
preserving existing agricultural land as strategies that may strengthen aspects of the food system
and supply chain.18
U.S. Treasury Community Development Financial Institution
(CDFI) Fund, Healthy Food Financing Initiative (HFFI)19
Congress provides funding to the U.S. Treasury for the HFFI within its Community Development
Financial Institutions (CDFI) Fund. The HFFI provides grants, training, and technical assistance
to CDFIs so they can provide loans for local projects that increase access to healthy foods in
underserved communities. For example, a CDFI may use HFFI funding to provide financing for
the renovation of a non-retail wholesale distribution facility of fresh produce.20 Congress also

17 For more information, including a national map showing the regions covered by the federal regional commissions
and authorities, see CRS Report R45997, Federal Regional Commissions and Authorities: Structural Features and
Function, by Julie M. Lawhorn. Interested grant applicants are encouraged to contact state program managers for the
federal regional commissions and authorities. State program managers are typically based in state economic
development agencies.
18 Ben Kerrick et al., Agriculture and Local Food Economies in the Appalachian Region, KK&P and Mass Economics,

prepared for the ARC, April 6, 2022, https://www.arc.gov/report/agriculture-and-local-food-economies-in-the-
appalachian-region/.
19 For more information, see “Healthy Food Financing Initiative” in CRS Report R47169, Community Development
Financial Institutions (CDFI) Fund: Overview and Programs, by Donald J. Marples and Darryl E. Getter; and CDFI
Fund, “CDFI Program,” https://www.cdfifund.gov/programs-training/programs/cdfi-program. For a list of active
CDFIs, see https://www.cdfifund.gov/programs-training/certification/cdfi.
20 CDFI Fund, “HFFI-Financial Assistance Application Guidance,” https://www.cdfifund.gov/sites/cdfi/files/2021-02/
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

provides HFFI funding to USDA.21 The Department of Health and Human Services (HHS)
allocated a portion of congressional appropriations to HFFI activities between FY2011 and
FY2016 (described below).
U.S. Department of Health and Human Services (HHS)
Community Economic Development (CED) Grant Program22
The CED program provides funding to private, non-profit community development corporations
(CDCs) for projects that create and expand businesses and job opportunities for low-income
residents.23 For example, CED funds may be used to construct affordable retail space for food
business owners in order to expand employment opportunities for individuals with low income.24
HHS previously administered the Healthy Food Financing Initiative (HFFI) through the
Community Economic Development program. The HFFI was designed to expand food access in
rural and urban communities and support business development. HHS allocated approximately
$10 million per year to the HFFI between FY2011 and FY2016. The HHS HFFI is not currently
active; the most recent HHS HFFI funding opportunity announcement closed in 2016.25 However,
certain projects involving employment opportunities related to food systems or food businesses
may be eligible for CED funding.
U.S. Housing and Urban Development (HUD) Programs
HUD administers programs to support community and economic development objectives,
including the Community Development Block Grant (CDBG) program and the Section 108 Loan
Guarantee Program (Section 108).
Community Development Block Grant Program26
HUD’s CDBG program is a flexible source of federal funding available to states and localities for
a broad range of economic and community development-related purposes, which could
potentially include certain food system-related activities. CDBG activities may be used to support
neighborhood revitalization efforts, expanding economic opportunities, and improving public
facilities. CDBG activities may also include support for public services such as youth services,
employment training, and food banks, which may contribute to aspects of local and regional food

6.%20HFFI-FA%20Guidance%20FY%202021.pdf.
21 7 U.S.C. § 6953. For more information, see CRS In Focus IF12214, The USDA Healthy Food Financing Initiative,
by Lisa S. Benson.
22 For more information, see CRS Report RL32872, Community Services Block Grants (CSBG): Background and
Funding, by Conor F. Boyle.
23 For the purposes of CED grants, CDCs may include faith-based organizations and Tribal and Alaskan Native
organizations. See HHS, “Community Economic Development,” https://www.acf.hhs.gov/ocs/programs/ced.
24 For a summary of active CED grant projects, see HHS, “CED Map Current Grant Recipient Locations FY 2022,”
https://www.acf.hhs.gov/ocs/map/ced-map-current-grantee-locations.
25 Active federal funding opportunities are searchable at https://www.grants.gov/. For more information on the HHS
HFFI, see “Healthy Food Financing Initiative” in CRS Report RL32872, Community Services Block Grants (CSBG):
Background and Funding, by Conor F. Boyle; and “CED Healthy Food Financing Initiative Information,”
https://www.acf.hhs.gov/ocs/grant-funding/healthy-food-financing-initiative-information.
26 For more information about the CDBG program, see CRS Report R46733, Community Development Block Grants:
Funding and Allocation Processes, by Joseph V. Jaroscak.
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

systems.27 State and local CDBG administrators typically have wide discretion in how CDBG
funds are used.28 However, CDBG’s authorizing statute requires states and local governments to
certify that all proposed activities meet one of the program’s national objectives:
1. principally benefit low- and moderate-income (LMI) persons;29
2. aid in the prevention or elimination of slums or blight; or
3. meet an urgent need by addressing conditions that pose a serious and immediate
threat to the health and safety of residents.30
Section 108 Loan Guarantee Program31
HUD’s Section 108 program allows local and state governments to leverage their CDBG
allocation as a loan guarantee for large-scale development projects. According to HUD, Section
108 thus enables grantees to undertake substantially larger community development projects than
CDBG grants alone would support.32
Small Business Administration (SBA) Growth Accelerator Fund
Competition (GAFC)33
In addition to business credit programs (e.g., loan guarantees), the SBA also administers
programs that provide specialized management, coaching, and capital access services to facilitate
the growth of high-tech small businesses. The Growth Accelerator Fund Competition (GAFC) is
an SBA-administered prize competition that supports the development of business
accelerators, incubators, and related entrepreneur-support programs and may be available for the
development of food entrepreneurs. The program focuses on small businesses engaging in
research and development regions with fewer conventional sources of access to capital (i.e.,
venture capital and other investors).

27 For examples of CDBG expenditure reports, see U.S. Department of Housing and Urban Development, CDBG
Activity Expenditure Reports, https://www.hudexchange.info/programs/cdbg/cdbg-expenditure-reports/.
28 For a directory of HUD CDBG grantees, see https://www.hudexchange.info/grantees/find-a-grantee/.
29 The LMI benefit national objective is required to total 70% of a grantee’s projects under the conventional CDBG
program, although waivers may be obtained in extenuating circumstances. For information on HUD’s definitions for
low and moderate income, see https://www.hudexchange.info/programs/cdbg/cdbg-low-moderate-income-data/.
30 42 U.S.C. §§5301 et seq., as interpreted by HUD at 24 C.F.R. §570.200; and the HUD Guide to National Objectives
and Eligible Activities for CDBG Entitlement Communities.
31 For more information, see CRS In Focus IF11889, HUD Section 108 Loan Guarantee Program: An Overview, by
Joseph V. Jaroscak.
32 U.S. Housing and Urban Development (HUD), HUD Exchange, “Section 108 Loan Guarantee Program,”
https://www.hudexchange.info/programs/section-108/.
33 For more information, see SBIR, “Accelerators,” https://www.sbir.gov/accelerators.
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Table 1. Select Federal Economic Development Programs for Local Food Systems
(Financial Assistance and Prize Competition Programs for Non-Business Entities)
Agency
Program
Form of Assistance
Project Example
Appalachian
Area
Economic development grant
A university entity received a
Regional
Development,
program for the Appalachian
grant to develop a regional
Commission
other programs
Region. The program funds
“foodshed.” The project involved
(ARC)
construction and non-
business development, market
construction expenses.
development, training for new
growers and food businesses,
value-added production support,
and agritourism promotion.
Delta Regional
States’ Economic
Economic development grant
A non-profit received a grant for
Authority (DRA)
Development
program for the Delta Region.
construction expenses to build
Assistance
The program funds construction
an incubator for small food
Program (SEDAP),
and non-construction expenses.
enterprises.
other programs
Economic
Public Worksa
Economic development grant
A community col ege received a
Development
program for economically
grant for construction expenses
Agency (EDA)
distressed areas. Eligible activities
to build a shared, licensed
include water, sewer, roads,
commercial kitchen for food
utilities, and site and building
entrepreneurs.
improvements, among others.
EDA
Economic
Economic development grant
A county received a grant to
Adjustment
program that assists areas
capitalize a revolving loan fund
Assistancea
experiencing long-term economic that was used to finance the
distress or sudden and substantial expansion of a farm-to-table
economic dislocation. The
butcher shop.
program funds construction and
non-construction activities.
EDA
Local Technical
Economic development grant
An economic development
Assistance
program to help stakeholders
organization received a grant to
analyze the feasibility of potential
conduct a targeted market study
economic development projects.
on the feasibility of a food
business incubator.
Housing and
Community
Community development grants
A county received a grant to
Urban
Development
to state and local governments
renovate a facility that wil be
Development
Block Grant
for neighborhood revitalization,
used for a farmers market in a
(HUD)
(CDBG) state and
housing rehabilitation, and
low-income neighborhood.
entitlement
community and economic
programs
development projects.
HUD
Section 108 Loan
Loan guarantee program available A city used a loan guarantee to
Guarantee
to CDBG grantees to finance
finance the purchase of a
large-scale community and
shopping center, which was then
economic development projects.
redeveloped to include a grocery
store, pharmacy building,
restaurant pad sites, and other
stores.
Health and Human Community
Grants to community
A CDC received a grant for
Services (HHS)
Economic
development corporations
equipment, supplies, and
Development
(CDCs) for projects that create
operating expenses to transition
and expand businesses and job
an existing produce distribution
opportunities for low-income
hub into a kitchen and processing
residents.
center.
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

Agency
Program
Form of Assistance
Project Example
Northern Border
State Economic
Economic development grant
A town received a grant to
Regional
and Infrastructure
program for the NBRC Region.
support food hubs that assist
Commission
Development
The program funds construction
farm and food businesses with
(NBRC)
Investment
and non-construction expenses.
expanding market access and
workforce training activities.
SBA
Growth
Competitive prize funding to
A food accelerator program
Accelerator Fund
accelerators that support the
received funding to support food
Competition
growth of high-tech small
and agriculture technology
businesses.
(AgTech) entrepreneurs and
supply chain resiliency activities.
Treasury
CDFI Fund
A capital access grant program
A regional credit union received
Financial
for certified CDFIs to expand
a grant to make loans for
Assistance,
healthy food financing activities.
businesses to start or expand
Healthy Food
grocery stores, co-ops, and farm
Financing Initiative
businesses.
Source: Compiled by CRS using agency websites and press releases.
Notes: Eligibility criteria varies by agency and program. The ARC, DRA, NBRC, and other federal regional
commissions and authorities encourage interested applicants to contact the state program representatives—
often based at state economic development agencies.
a. Indicates that the EDA’s Public Works or Economic Adjustment Assistance (PWEAA) programs are
designed to assist areas that are economically distressed as measured by unemployment levels, per capital
income, or a ‘special need’ circumstance, among other requirements (see CRS In Focus IF12074, Areas of
Economic Distress for EDA Activities and Programs). Additionally, projects must serve an area that has a
Comprehensive Economic Development Strategy (CEDS) or equivalent strategy and meet other
requirements in order to be eligible for PWEAA funding.
For Businesses: Tax Incentives and Other Programs
There are limited federal economic development grants for starting or expanding a business or for
purchasing or renovating land or property that is privately owned. Instead, businesses may
receive assistance through tax credit programs, federally supported loans, and technical assistance
programs. The following selected programs provide assistance to businesses, which could include
producers, retail, and other food-related businesses.34 For a review of USDA programs for food
businesses and agricultural producers, see CRS Report R46538, Local and Urban Food Systems:
Selected Farm Bill and Other Federal Programs.
Federal Tax Credit Programs
Federal tax policies are a form of financial incentives that can be designed to facilitate economic
development objectives. These policies may be used to facilitate or incentivize investment to
strengthen local food system assets or related infrastructure (e.g., tax credits for private
developers to build a grocery store in an underserved neighborhood). Tax credits may be
structured to provide an investor with an income tax credit to reduce their tax liability and other
purposes. For example, Congress authorized the Opportunity Zones and New Market Tax Credit
programs, which may encourage capital investment in low-income or economically distressed

34 For additional examples of finance tools for the development of food systems and businesses, see CDFA Food
Systems Finance Best Practices Guidebook, Community Development Finance Association, December 2022,
https://www.cdfa.net/cdfa/cdfaweb.nsf/resourcecenters/foodsystems.html.
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communities.35 These programs could be used to develop food system assets or food businesses in
certain areas. Additionally, the National Park Service and the Internal Revenue Service administer
federal historic preservation tax credits. These tax credits are used for historic rehabilitation
projects, and could be of interest to food businesses seeking to renovate or repair an eligible,
historic building for retail, food production, workforce training, or other purposes.
Credit Assistance Programs
Credit assistance programs may help businesses finance startup, operations, and expansion
expenses through loan guarantee, loan, and revolving loan fund (RLF) programs. Federal credit
assistance programs are often designed to address gaps in private lending or to extend access to
credit to underserved areas or borrowers. Through these programs, food businesses—including
those in economically distressed areas—may have increased access to credit. Federal agencies,
such as the SBA, may issue loan guarantees to intermediary lenders to help the lenders make
loans to businesses that may not otherwise qualify. For example, a food business may use an
SBA-guaranteed loan to expand its retail footprint into a new market. Federal programs, such as
the U.S. Treasury CDFI Fund or the EDA’s EAA, may also issue grants to intermediary lenders
(e.g., community banks, CDFIs, state economic development agencies) so that they may issue
loans to businesses. For instance, food entrepreneurs may receive loans from the CDFI Fund or
EDA grantees in order to purchase equipment for a new product line or as gap financing to cover
operations and payroll expenses during the start-up phase of a food enterprise.
Small Business Administration (SBA) Credit Assistance Programs36
Small food businesses and entrepreneurs may receive assistance from the SBA’s credit assistance
programs and business technical assistance programs that are available to all small businesses.
The SBA supports/administers several lending programs designed to assist small- and medium-
sized firms including
 the SBA 7(a) loan guarantee program, which guarantees a portion of the principal
of loans made to small business by third-party lenders for the purchase of fixed
assets (i.e., property, equipment), working capital, financing of start-ups, or to
purchase an existing business (up to $5 million);
 the SBA 504 Loan program, which provides small business financing for the
purchase of real estate and the purchase or construction of fixed assets (up to
$5.5 million, depending on the loan’s purpose); and
 the SBA Microloan program, which provides financing for smaller projects up to
$50,000.
Revolving Loan Fund (RLF) Programs37
Businesses may receive a loan through federally supported RLF programs, which may be
capitalized by the EDA, USDA Rural Development, federal regional commissions and

35 For more information, see CRS Report R45152, Tax Incentives for Opportunity Zones, by Donald J. Marples; and
CRS Report RL34402, New Markets Tax Credit: An Introduction, by Donald J. Marples.
36 For more information, see CRS Report RL33243, Small Business Administration: A Primer on Programs and
Funding, by Robert Jay Dilger, R. Corinne Blackford, and Anthony A. Cilluffo. Interested borrowers can find a lender
through the online “Lender Match” tool at https://www.sba.gov/funding-programs/loans/lender-match.
37 For more information, see CRS In Focus IF11449, Economic Development Revolving Loan Funds (ED-RLFs), by
Julie M. Lawhorn.
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

authorities, private capital sources, and other state and federal agencies. Some federal economic
development programs support RLFs by providing grants or loans to capitalize the fund and cover
administrative expenses. The initial funds can be combined with additional capital from other
public and private sources. The repayment of principal, interest payments, and fees replenish
RLFs so that future loans can be made to eligible borrowers and the loan fund can eventually be
sustained or “revolved” without subsidy.
The purpose of many federally supported RLFs typically is to supplement—not supplant—
conventional lending activity where business and development credit needs are not fully
addressed. Such RLF programs can provide credit to businesses and markets that may be
underserved by commercial lenders, including food entrepreneurs and small or nontraditional
businesses and minority-owned businesses. RLFs are often administered by state and local
agencies, such as state economic development agencies and economic development districts
(EDDs). Nonprofit organizations may be eligible to receive a loan from some RLF programs, but
the eligibility criteria for each RLF are determined by the intermediary lending organization.
Community Development Financial Institution (CDFI) Fund38
CDFIs include community development banks, credit unions, and loan and venture capital funds.
CDFIs provide loans and other services to businesses, homebuyers, community developers, and
investors in distressed areas. The U.S. Treasury’s CDFI Fund provides financial and technical
assistance to support CDFIs in economic and community development activities. The CDFI Fund
does not provide assistance directly to businesses; businesses receive assistance through certified
CDFIs. A CDFI may receive financial assistance from the CDFI Fund to lend to community
partners involved in developing sites for grocery stores or farmers markets.
Select Business Technical Assistance Programs
Business technical assistance programs generally support intermediary organizations that provide
specialized services to businesses. The intermediary organizations may operate in partnership
with anchor institutions, such as universities, colleges, CDCs, non-profit organizations, or units of
state, regional, or local government. Services may include assistance to firms to access capital;
develop business plans or cooperative business models; expand product and supply chains; or
develop marketing or management activities, among other services. Agencies involved in
business technical assistance include SBA (e.g., Small Business Development Center
programs),39 Minority Business Development Administration (e.g., MBDA Business Center
programs), 40 EDA (e.g., University Center programs), and National Institute of Standards and
Technology (NIST) (e.g., Manufacturing Extension Partnerships),41 among others.42

38 For more information, see CRS Report R47217, Community Development Financial Institutions (CDFIs): Overview
and Selected Issues, by Darryl E. Getter. For a list of active CDFIs, https://www.cdfifund.gov/programs-training/
certification/cdfi.
39 For more information, see CRS Report R41352, Small Business Management and Technical Assistance Training
Programs, by Robert Jay Dilger, R. Corinne Blackford, and Adam G. Levin.
40 For more information, see CRS Report R45015, Minority Business Development Agency: An Overview of Its History
and Current Issues, by Julie M. Lawhorn. The MBDA’s online directory includes the location and contact information
for MBDA Business Centers and Specialty Centers at https://www.mbda.gov/mbda-programs.
41 NIST is an agency of the U.S. Department of Commerce. For more information, see CRS Report R44308, The
Hollings Manufacturing Extension Partnership Program, by John F. Sargent Jr.
42 See “Table 5. Selected Programs for Business Development, Including Entrepreneurship Assistance, Export
Assistance, and Access to Capital Activities,” in CRS Report R46683, Federal Resources for State and Local
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

Other Resources
In addition to the grant and loan programs noted above, federal agencies and federal regional
commissions and authorities may be involved in interagency initiatives to support local food
systems and local food businesses. For instance, the USDA and the Environmental Protection
Agency (EPA) provide planning assistance for local food system development through the Local
Foods, Local Places Planning Assistance program. However, the program does not provide direct
financial assistance in the form of grants or loans.43
Nonfederal resources from state, regional, and local government entities and private and
philanthropy organizations may also support the development of local food systems. For instance,
state and local agencies are often involved in administering grant and tax credits for economic
development programs and select business development services, including some efforts designed
specifically to support food entrepreneurs and food system development.44 Regional Development
Organizations (RDOs) help communities access federal and state funds in order to plan and
implement major infrastructure improvements and economic resiliency and community
development initiatives. RDOs could potentially connect stakeholders to information about
grants, partnerships, and other state and federal resources.45

Author Information

Julie M. Lawhorn

Analyst in Economic Development Policy

Economic Development, by Julie M. Lawhorn.
43 See U.S. Environmental Protection Agency, “Local Foods, Local Places,” https://www.epa.gov/smartgrowth/local-
foods-local-places.
44 For example, state and local governments have implemented strategies to attract retail grocery businesses to
underserved markets. New York City, NY administers the Food Retail Expansion to Support Health (FRESH) program
that provides local tax incentives (e.g., sales, building, and mortgage recording) for retail supermarkets. See
https://edc.nyc/program/food-retail-expansion-support-health-fresh. The EDA’s resource directory lists each state’s
economic development agency; see https://www.eda.gov/resources/directory/.
45 RDOs are multi-jurisdictional, quasi-governmental organizations that provide planning and development services to
their member local governments. RDO refers to a broad category of organizations that includes economic development
districts (EDDs), local or area development districts, councils of governments, regional planning commissions, and
similar organizations. For more information, see CRS In Focus IF11511, The Role of Regional Development
Organizations (RDOs) in Economic Development, by Julie M. Lawhorn. For EDA’s directory of EDDs, see
https://www.eda.gov/edd/.
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Federal Economic Development Resources for Food Businesses and Systems: In Brief

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
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