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December 15, 2023   /   K. Lee Graham

The USDA’s Rural Energy for America Program (REAP) loan program empowers developers with up to $25 million in development capital for renewable energy projects. The loan is best utilized for utility-scale developments in solar, waste-to-energy, and other emerging forms of clean energy.

REAP loans are widely viewed as one of the most affordable forms of development capital. The USDA-guarantee makes it possible to borrow with a 25-year term. By leveraging longer amortizing debt, developers can access immediate resources that protect their long term liquidity.



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 REAP financing process can be incredibly complex, especially if project timelines conflict with the financing timeline. Developers typically find it easier to qualify for USDA financing after their project has achieved a few critical milestones. We use the following 5 indicators to determine when a project is ready to apply for USDA financing.

Financing Checklist for a Successful USDA Loan Application: 5 Items to Finalize Before Applying for a REAP Loan

  • Site Control

One of the key criteria for REAP financing eligibility is site control or land ownership. USDA financing cannot proceed without site control of a project in a USDA-defined rural area.

Have site control? Use the USDA’s rural zone tool to check if your site location is eligible.

  • Power Purchase Agreement (PPA)

Applying for USDA financing with a power purchase agreement, or PPA, in hand is highly beneficial. The power purchase agreement grants a level of assurance in the project and makes your application for UDSA REAP financing even stronger.

The PPA is a testament to your project’s feasibility which will help you and your lender alike. Ensure you’ve secured a power purchase agreement before applying for REAP financing.

  • Interconnect Agreement

Along with a PPA, an interconnect agreement proves the viability of your project. This agreement outlines the details for the project’s connection to the grid and the associated terms. Providing both the PPA and an interconnect agreement at the beginning of the application process is best practice for an efficient REAP Loan application.

  • Tax Equity

Tax equity is a crucial resource that developers must verify before getting approved for REAP loan financing. Be prepared to provide documentation on how much equity is available and its source(s). Your lender will need to verify this information throughout the financing process.

Prepare your documents before beginning an application to maximize the efficiency of the USDA financing process.

  • Construction Budget and Contractor

It is wise to have a finalized construction budget before beginning the REAP financing process. This will allow the financing team to provide the most accurate estimate of the project’s total cost.

We recommend engaging a contractor before applying for a REAP loan to ensure a smooth application process.

When deployed correctly, the USDA REAP loan program can be one of the most efficient forms of development capital available for renewable energy financing. Secure these 5 items before applying for a REAP loan to streamline your path to funding.

Apply for REAP Loan Financing:  Pre-Qualify Your Renewable Energy Project

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: The Renewable Energy financing division at West Town Bank & Trust is dedicated to supporting clean energy entrepreneurs throughout the US with the resources and infrastructure needed to succeed in the modern world.

West Town Bank & Trust has financed over $900 Million in REAP loans for Solar Energy alone. The team works in partnership with renewable energy experts and USDA experts to bring the authority and expertise needed in space.