In 2005, USDA Rural Development issued about $900 million in loans and grants in North Carolina, more than in any other state, said Eddie Miller, assistant to the state director of USDA Rural Development. Most of the money went to housing, community facilities and utility improvements.

Only about $400 million was originally budgeted to the state in 2005, Miller estimates. But North Carolina has been aggressive about pursuing money pooled after other states fail to fully use their funding.

The agency's Business and Industry Loan Guarantee program began in the 1970s.

The program helps banks in rural areas lend to businesses they might not otherwise support because of legal lending limits or the riskiness of a project. A loan guarantee can also allow a business to borrow money from a bank over a longer term.

Until about 15 years ago, the program supported more manufacturing companies. But the economy has shifted, and the program now supports more service industries, Miller said.

In 2005, the USDA approved about $26 million in business and industry loan guarantees in North Carolina. The state has about 138 outstanding business loan guarantees, more than any other state except California.

Agency officials argue collection rates are good in North Carolina. They point out that only 4.83 percent of guaranteed business loans in the state are delinquent. The national average is 6.72 percent.

ONLINE: www.rurdev.usda.gov/nc