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August 21, 2023   /   K. Lee Graham

Access efficient development capital for solar, biogas, and clean energy. Understand the viability of leveraging the USDA REAP financing program.

When processed correctly, USDA development capital can be used to fund a variety of rural renewable projects with long-term, affordable debt tailored to the interests and independence of the American clean energy economy.

Since 2016, our renewable energy financing team has helped entrepreneurs access over $900 million in USDA solar financing as a top 5 USDA lender.

This article outlines essential information about securing and deploying renewable energy development capital through the USDA REAP Loan Program.

The Program: Renewable Energy for America Program (REAP)

The USDA’s Renewable Energy for America Program (REAP) plays a vital role in supporting America’s energy independence. REAP loans of up to $25 Million are available for qualified businesses to support every aspect of a development project.

The REAP loan is our most recommended financing option to secure development capital for utility-scale renewable energy projects. The USDA-guaranteed loan is available to use for solar, gas, and other alternative energy.

Note: the REAP loan is processed and funded by certified lending institutions. Entrepreneurs are not working the USDA directly. The program simply enables businesses to leverage the benefits of a commercial loan that is guaranteed by the federal government.

More details on REAP Loans at West Town Bank & Trust >>

Our most popular use case for the REAP loan is utility-scale solar energy and innovative clean energy projects including biogas and waste-to-energy facilities. The REAP loan is appealing to commercial developers because of its uniquely incentivized loan terms:

  • Up to 30-year term
  • Borrow up to $25 million
  • Fully amortizing
  • Flexible use of proceeds
  • Up to 90% loan guaranty

The REAP loan can also be used to make energy-efficient improvements to existing businesses and facilities in rural areas. Proceeds can also support a wide variety of needs, including biodiesel RE and anaerobic digester facilities, as well as projects related to the generation of energy through wind, hydrogen, and the ocean.

Deploying REAP Loans for Development Capital: How to Use REAP Loans

Renewable energy developers can use REAP loans to fuel their next renewable energy project phase. Eligible uses of the REAP loan include:

  • Financing for land purchases. Use a REAP loan to purchase real estate for renewable energy projects.
  • Financing of equipment purchases. REAP loans can be used to finance the purchase and lease of equipment vital to development projects.
  • Flexible development capital to bridge between construction phases. REAP loans can open access to working capital at reasonable rates, used at the business owner’s discretion.
  • Hiring and retaining top talent. Use REAP loan funds to offer competitive compensation for engineers, project managers, financial analysts, and other key talent needed to kickstart a project.

A REAP loan can be an excellent financing choice for entrepreneurs when leveraged effectively, largely due to this flexibility in how entrepreneurs may choose to use the funds.

We often address a common misconception about the USDA programs: that a ‘government’ financing program could never be as efficient as a private investment for development capital. However, when deployed correctly, the USDA programs can be one of the most affordable long-term debt solutions for US-based renewable energy projects.

REAP loans give developers the ability to access more debt while retaining their equity in the project, which we’ve seen many developers take advantage of over the years to realize additional gains while maximizing their liquidity.

–        SVP/Director of Renewable Energy, Jeremy Baird

USDA REAP Loan Eligibility: 5 Key Criteria

To secure the USDA government guarantee and the favorable terms that come with it, REAP loan applicants must supply detailed documentation and abide by the complex USDA financing process.

It’s frequently regarded as a complicated process, however, financing with a REAP loan can be as easy on the borrower as a typical bank loan when key criteria are met. Our team’s USDA expertise streamlines the REAP loan financing process, helping developers maximize their efficiency and liquidity from start to finish.



To realize the incentives of the government-guaranteed program, REAP Loans are most successful when used for utility-scale projects that include the control or purchase of significant real estate. REAP Loans are recommended for the following scenario:

Financing Request: $5-25 Million

Financing Use: Acquisition of real estate, purchase of equipment, acquisition of fixed assets, development capital.

Funding Timeline: 90 days after the environmental process is complete.

Project Location: Rural area within the United States (as defined by the USDA)

The USDA commercial loan process at West Town Bank & Trust begins by establishing baseline eligibility for the REAP loan program. If a project meets these five criteria, it is likely the project will be a fit for REAP financing and the team will proceed with the REAP loan application. If the project does not meet the following criteria, the financing team will redirect inquiries to a more efficient financing program for the project.

5 Criteria for Eligibility for the USDA REAP Loan Program

1.Do you have site control?

USDA REAP eligibility is largely dependent on the project site location and control. Projects must be in a USDA-defined ‘rural area’ to qualify for financing.

Check the geographic eligibility of your site using the USDA’s rural zone tool.

2. Do you have a power purchase agreement (PPA)?

Projects are most successful with the REAP financing program after a PPA is secured. This agreement grants the assurance of your project’s feasibility.

3.    Do you have an interconnect agreement?

A financing team will ask for an interconnect agreement in addition to the PPA. It is best practice to provide both at the beginning of the application process for the most efficient financing process possible.

4.    Is there appropriate tax equity?

Tax equity is highly beneficial to secure REAP financing. Be prepared to provide documentation on how much equity is available, and its source(s).

5.    Do you have a construction budget/contractor yet?

Our experts typically recommend beginning the REAP financing process after a construction budget is finalized. For the most efficient application process, engage a contractor prior to applying for a REAP loan.

West Town Bank & Trust takes a consultative approach to renewable energy financing, with a team of experts specialized in leveraging the USDA programs for development capital and streamlining the process. Our efficiency-driven approach has positioned our team as a leader in the renewable energy space, enabling more developers to leverage more debt at the most efficient rates possible.

Apply for REAP Loan Financing:  Connect with a Banker

Use the form below to begin the application process for a REAP loan through West Town Bank & Trust. A member of our team will schedule a time to discuss your eligibility and answer any questions about leveraging the REAP loan program for development capital.

About West Town Bank & Trust

West Town Bank & Trust is a dedicated financing partner for solar energy, specializing in the efficient application of the USDA’s Rural Energy for America Program. With its specialized renewable energy team, West Town streamlines access to development capital with creative financing solutions. West Town has authorized over $600 million in financing through the USDA REAP loan program since 2016, facilitating industry innovation, the growth of clean energy, and rural economic development. The bank is chartered in Illinois with headquarters in Raleigh, North Carolina.