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:
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:
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.
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.
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:
Read more about how RMAP and other rural development progams have helped grow jobs in rural communities on NSAC’s blog.
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.
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.
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Please note: Future funding cannot be projected as funding levels will be determined a year at a time by Congress. For the most current information on program funding levels, please see NSAC’s Annual Appropriations Chart.
Section 6422 of the Agriculture Improvement Act of 2018 amends Section 379E(d) of the Consolidated Farm and Rural Development Act of 1961, to be codified at 7 U.S.C. Section 2008s.
Last updated in August 2019.