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In the world of economic development, there’s often a trade-off between public spending and tangible results. But what if we told you there’s a federal program that not only strengthens rural communities and drives job growth—but also grows state tax revenues in a measurable, lasting way?
That’s exactly what the USDA Business & Industry (B&I) Guaranteed Loan Program is doing. According to a 2025 economic assessment by Summit LLC, a 1% increase in B&I loan investment results in a 0.55% increase in sales tax revenue for the average U.S. state in the long run.
At First National Bank of Oklahoma, we work closely with rural business owners, city leaders, and state policymakers who care deeply about maximizing impact per dollar. And the data is clear: USDA B&I loans are a proven way to generate fiscal returns far beyond the initial investment.
The Multiplier Effect in Action
Let’s break it down.
A 0.55% increase in state sales tax revenue for every 1% increase in USDA B&I investment may sound incremental—but it’s a powerful compounding force.
According to the Summit report, this relationship holds consistently across multiple states, geographies, and industries. Why? Because B&I loans inject capital into real businesses that:
- Buy more goods and equipment
- Hire more local employees
- Drive more foot traffic
- Increase taxable transactions across entire regions
In short, every dollar lent has ripple effects. It doesn’t sit in an account—it moves through payrolls, purchase orders, and point-of-sale systems, generating revenue for state and local governments.
Why This Matters to Policymakers
Most economic incentive programs—whether tax credits, grant matching, or infrastructure spending—come with a delay in revenue realization or risk of misuse.
But B&I loans are performance-based and tied to real-world business expansion. The businesses must:
- Qualify through a rigorous underwriting process
- Repay the loans (with interest)
- Operate in eligible rural areas
- Create or retain jobs
This makes the program an attractive tool for policymakers seeking:
- High-return, low-risk economic development
- Smart use of federal guarantees
- Ways to support local tax bases without raising rates
For states like Oklahoma, which rely on sales tax for general revenue, B&I-backed growth is a net fiscal gain.
The Research Behind the Revenue Boost
The Summit study used county-level sales tax data and USDA investment records to measure the long-term impact of B&I lending. Their findings showed:
- Counties with sustained B&I investment saw higher long-run growth in sales tax revenue than comparable counties without investment.
- The 0.55% increase in sales tax revenue per 1% investment was statistically significant and persistent over multiple years.
- The pattern held even after controlling for macroeconomic trends, rural population changes, and state tax policy differences.
This makes the USDA B&I program a rare example of government-backed financing that pays for itself—not just in job creation, but in measurable tax returns.
A Practical Example: Oklahoma’s Advantage
Let’s apply this finding to Oklahoma.
Between 2015 and 2024, Oklahoma businesses received $665 million in USDA B&I loan guarantees. Using the Summit model:
- A 10% increase in B&I investment statewide could boost Oklahoma’s annual sales tax revenue by roughly 5.5%.
- For a state with ~$3 billion in annual sales tax collections, that’s more than $165 million in potential recurring revenue.
That’s not a one-time spike—it’s a long-term increase tied to business expansion, consumer activity, and job creation in rural areas.
At First National Bank of Oklahoma, we believe smart lending can help the state grow its tax base without raising tax rates—by focusing on programs like B&I that deliver results where it matters.
How First National Bank of Oklahoma Supports Smarter Growth
We’re proud to be a leading USDA-approved lender in Oklahoma, helping businesses unlock the power of B&I financing.
Our experienced team can help with:
- Eligibility and loan structuring
- Applications for new projects or expansions
- Pairing B&I loans with Opportunity Zones or state-level incentives
We believe investing in rural businesses is good for your bottom line—and good for Oklahoma’s future.
Final Thought: The Numbers Add Up
Economic development doesn’t have to be complicated—or costly. With the USDA B&I program, we have a tool that:
- Drives private investment
- Strengthens small businesses
- Creates jobs
- And boosts tax revenue
That’s the kind of small investment with a big return—and First National Bank of Oklahoma is here to help make it happen.