NSAC's Blog
Rural Microentrepreneur Assistance Program Awards Announced
September 25, 2014
On Wednesday, September 24, USDA Rural Development Acting Under Secretary Doug O’Brien announced $19.8 million in grant and loan funding under the Rural Microentrepreneur Assistance Program (RMAP) to 44 organizations, enabling them to provide microloans and training and technical assistance to rural microentrepreneurs who are seeking to start or grow small businesses and create jobs.
These awardee organizations, known as Microenterprise Development Organizations (MDOs), are nonprofit entities, Indian tribes, or public institutions of higher education that serve as intermediaries to provide access to credit and business development training and technical assistance to microentrepreneurs and microenterprises.
Administered by the Rural Business-Cooperative Service within USDA’s Rural Development agency and established under the 2008 Farm Bill, RMAP provides loans of up to $500,000 to MDOs, who, in turn, make microloans of $50,000 or less for business start-up or development. For many microenterprises, which are very small businesses with 10 or fewer full-time employees, RMAP provides access to credit that may otherwise not be available through conventional lending institutions. RMAP also provides grants for MDOs to provide technical assistance and training to microentrepreneurs, particularly in rural areas that have experienced significant outmigration. Microenterprises may, but are not required to, be food or agriculture-related.
NSAC congratulates all the awardees and applauds USDA’s work on a program that “increase[s] economic opportunities in rural areas,” as noted by Acting Under Secretary O’Brien.
NSAC Member Groups Again Awarded RMAP Loan Funding
In particular, we congratulate two NSAC member groups who received awards:
- The Center for Rural Affairs (CFRA), based in Lyons, Nebraska, which received $500,000 in loan funding to provide microloans to microenterprises in Nebraska through its Rural Enterprise Assistance Project (REAP). CFRA has made 18 loans totaling $664,000 with RMAP capital, leveraging $144,000 in other funds, and creating or retaining 39 jobs. CFRA has also provided technical assistance to 467 clients using RMAP funds.
Through RMAP, CFRA has helped the Koch family open 6 Mile Café in Dawson, Nebraska, which employs 20 local residents part-time in rural Southeast Nebraska. With a $50,000 RMAP loan from CFRA, the Koch family was able to finance the remaining cost of the project themselves. When asked about the impact of the RMAP loan, the Koch’s stated, “It wouldn’t have been possible without it, simple as that.”
- Fay-Penn Economic Development Council (Fay-Penn), based in Lemont Furnace, Pennsylvania, which also received $500,000 in loan funding to provide microloans to microenterprises in Fayette and several other surrounding counties in Pennsylvania. To date, Fay-Penn has loaned $578,708 to 14 small businesses. These loan projects generated an additional private investment of $231,353 and resulted in the creation and/or retention of 55 jobs.
As part of the RMAP funds, Fay-Penn was able to also secure technical assistance grant funding through the USDA. With these grant funds they contracted with the St. Vincent’s Small Business Development Center (SBDC) to assist 41 clients with developing a business plan. Twelve (12) of those business completed their business plans by the end of 2013 resulting in two (2) receiving financing from Fay-Penn’s loan fund.
By utilizing its RMAP loan funding, Fay-Penn was able to provide financing to Stefano’s Printing in Dunbar Township, which provides commercial printing and imprint advertising services. In business since 1958, this third-and-soon-fourth generation-operated family business was able to retain 6 jobs as a result of its RMAP loan.
RMAP and the 2015 Appropriations Cycle
Despite supporting job growth and retention and rural community and economic development, RMAP was not provided with any discretionary funding in the currently stalled House and Senate Agriculture Appropriations bills. The 2014 Farm Bill reauthorized RMAP and the program with $3 million in mandatory funding annually, a funding level which NSAC had worked to increase, but in the end, maintained from its 2008 Farm Bill level. The new farm bill also authorizes RMAP for up to $40 million in annually appropriated discretionary funding. UDSA has requested an additional $3.3 million for the program for 2015 and NSAC is continuing to advocate for that number in communications with Congress. When Congress takes up the final Appropriations bill for 2015 in December, we will continue to press for discretionary funding for the program.
Categories: Budget and Appropriations, Rural Development