“Small businesses and community organizations are vital to the health and livelihoods of Utah’s rural communities, and they have faced great hardship over the last several months,” Senator Romney said. “Our legislation will help them receive the support they need to keep their doors open and get through this pandemic.”
“Small businesses across Montana are hurting, and they need all the support they can get to weather this storm,” Senator Tester said. “This bipartisan legislation will help small businesses and family farms keep the lights on by providing critical resources to communities hit hardest by the pandemic, and make sure folks in rural Montana don’t get left behind during this public health crisis.”
“When Congress passed the CARES Act, we included provisions to reduce loan burdens for small businesses across the country,” Senator King said. “This was the right move, but by excluding USDA Rural Development loans from the program, the effort left out many rural businesses that are feeling the same pain. Now, as Congress considers the next coronavirus relief package, we should extend these protections to ensure that our rural communities can access the same type of support as the rest of the country.”
The CARES Act requires the SBA to pay the principal, interest, and any associated fees owed on these covered loans for a six month period, and the Senators’ bill would require USDA to do the same for certain RD program loans. These loans go through small community financial institutions and support local governments, Tribes, educational institutions, and small businesses to grow local economies with local dollars. Providing these small businesses and community organizations with the same support given to SBA borrowers is critical to ensuring their survival going forward, and the health of rural communities.
The Rural Equity Aid Act expands subsidies to the following USDA RD loan programs:
- Community Facilities – These loans are provided to public and nonprofit organizations for essential community facilities like hospitals, libraries, child care and community centers, and public facilities like fire stations or town halls.
- Business and Industry – These loans are provided to businesses, cooperatives, and nonprofits to develop and expand businesses in rural areas.
- Intermediary Relending Program (IRP) – These are loans of no more than $250,000 made through small local intermediaries to borrowers who are unable to get credit elsewhere, but need capital to get started or expand their business. These loans average less than $100,000 and support small local businesses.
- Rural Microentrepreneur Assistance Program (RMAP) – These are loans of no more than $50,000 made through local nonprofits. These loans are available to businesses with no more than 10 employees, making them a frequent choice for entrepreneurs looking for capital to start up a new business. In addition, RMAP loans are frequently used by women entrepreneurs.