USDA to Deadbeat Biofuel Borrowers: You’re Out
Published Date: 7/9/2026
Rule
Summary
Starting July 9, 2026, the USDA is updating its loan program that helps build cool new biofuel and renewable chemical factories. These changes make sure borrowers play fair and stick with their projects, stopping anyone who causes money losses from staying involved. With up to $250 million in loan guarantees, this update keeps the program strong and focused on real, long-term success.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
USDA backs up to $250M in loans
Starting July 9, 2026, the USDA's Section 9003 program provides loan guarantees up to $250,000,000 to help develop, build, or retrofit facilities that produce advanced biofuels, renewable chemicals, and biobased products. Eligible applicants for these guaranteed loans can use them for new construction or retrofitting to support new and emerging technologies.
No debt write-downs if owners stay in control
The rule prohibits debt write-downs for an existing borrower or guarantor when the same owners or principals keep control and decision-making authority, except if the write-down is directed or ordered under the Bankruptcy Code. That rule change is effective July 9, 2026.
Banned: staying involved after Agency loss
The USDA now bars borrowers, guarantors, and related parties who do not have arm's-length transaction relationships from remaining involved in a project any time the Agency sustains a financial loss. This change is intended to stop parties from profiting later on a project after the Agency has absorbed a loss and is effective July 9, 2026.
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Key Dates
Department and Agencies
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