Rural Microentrepreneur Assistance Program

Promoting rural economic growth through microloans and business assistance

Small businesses are the lifeblood of rural America, yet these entrepreneurs often struggle to access adequate levels of credit and business training. The U.S. Department of Agriculture’s (USDA) Rural Microentrepreneur Assistance Program (RMAP) aims to address this gap by providing loan capital and grants to non-profit organizations, community-based financial institutions, and local economic development councils. These partner organizations in turn provide technical services and microloans to rural small business owners in their states and local communities.

Learn More About RMAP:

Program Basics: Learn more about how this program works
Eligibility: Find out who can utilize this program
The Program in Action: Read success stories from those who have used this program
How to Apply and Program Resources: Learn more about the application process and where to find more information
Program History, Funding, and Farm Bill Changes: Learn about important policy changes and funding levels provided by the Farm Bill
En español: Para más información de programas de desarrollo rural, contacte la oficina del estado o visite la página web del RD

Program Basics

USDA’s Rural Business-Cooperative Service administers RMAP. The program provides loan capital and technical assistance funding to local and regional organizations that qualify as Microenterprise Development Organizations (MDOs), which in turn provide microloans and business development technical assistance to rural microentrepreneurs.

RMAP defines a “microentrepreneur” as a rural sole proprietorship or business with less than ten employees. These potential borrowers are required to show that they cannot obtain funding from other lending sources due to lack of credit or limited business development experience. The microbusinesses must be located in rural areas defined as any area other than a city or town that has a population of greater than 50,000 and the urbanized area contiguous and adjacent to such a city or town according to the latest decennial census.

Three categories of funding are available through RMAP:

Loan capital to MDOs to provide fixed interest rate microloans of less than $50,000 to rural entrepreneurs for the development of microenterprises in rural areas. Loans through MDOs cannot have a term longer than 20 years or an annual interest rate lower than 1 percent. Each MDO must establish a loan loss reserve fund and keep at least 5 percent of the outstanding loan balance in reserve.
Technical assistance grants to MDOs to provide marketing, management, and other technical assistance to microentrepreneurs who have already received or applied for an RMAP loan through an MDO. The annual grant award can be between 20 and 25 percent of the organization’s outstanding microloan balance. This assistance could include, but is not be limited to, networking, online collaboration and marketing, grant-writing, entrepreneurship workshops or conferences.
Technical assistance-only grants to MDOs that seek to provide business-based technical assistance and training to eligible microentrepreneurs and microenterprises, but do not seek loan funding.

The federal share of the cost of a microentrepreneur’s project shall not exceed 75 percent; the MDO must provide or secure the remaining 25 percent from non-federal sources. For any RMAP grant, MDOs must match at least 15 percent of the total amount of the grant in the form of matching funds, indirect costs, or in-kind goods or services.

Eligibility

To be eligible to apply for RMAP funding as an MDO, an organization must be a nonprofit entity, Native American Tribe, or public institution of higher education. They must also facilitate access to capital and have a demonstrated record or future plan of delivering relevant services.

MDOs are not required to be located in a rural area, but the microentrepreneurs they lend to must be in rural areas.

The Program in Action

Since 2008, USDA has made nearly 500 awards, totaling roughly $68 million for loan capital and $17 million in grants, to help MDOs provide training, business planning, and market development assistance as well as fixed interest rate microloans to rural microentrepreneurs.

RMAP funds have been used to:

Leverage additional loan capital through other lending sources to purchase the building space and equipment necessary to modernize a honey bottling facility in Nebraska.
Help an organic fruit and vegetable farm in Nevada County, California transition from selling exclusively through a community supported agriculture (CSA) model to expanding to also sell at farmers markets and a co-op grocery store.
Help a small business that provides tools and manufactures replacement parts in rural Kentucky hire seven new employees and expand from a 1,000 sq. ft. to a 30,000 square foot facility.

Read more about how RMAP and other rural development progams have helped grow jobs in rural communities on NSAC’s blog.

How to Apply and Program Resources

Applications for grants and loan capital through RMAP are accepted on an ongoing basis. Please reach out to your Rural Development State Office for additional information on applying.

You can also visit USDA’s RMAP page for more information.

Read about the latest news on RMAP on our blog.

Program History, Funding, and Farm Bill Changes

Congress created RMAP in the 2008 Farm Bill.

The 2014 Farm Bill reauthorized and provided $3 million in mandatory funding for RMAP each year from 2014 – 2018.

The 2018 Farm Bill reauthorizes RMAP, but unfortunately does not include any renewed mandatory funding for the program. This leaves the future of RMAP funding up to the annual appropriations process. The good news is that in response to the lack of farm bill support for RMAP, the FY 2019 annual appropriations bill included $3 million for the program. NSAC will continue to work with our partners and appropriators to ensure RMAP has adequate funding in future years.

The 2018 Farm Bill also establishes a minimum funding level an eligible MDO can receive in in technical assistance grants in an amount equal to or not less than 20 percent of the total outstanding balance of microloans made by the MDO. Additionally, the bill reduces the program authority to seek discretionary funding through the annual appropriations process from $40 million per year to $20 million per year for FY 2019 through FY 2023.