September 29, 2023
WASHINGTON, D.C. – Today,U.S. Senator Pete Ricketts (R-NE) and Senator Tina Smith (D-MN) introduced the “Rural Microentrepreneur Assistance Act” to extend and enhance the Rural Microentrepreneur Assistance Program (RMAP). Created in the 2008 Farm Bill, the program makes low-interest loans and grants for technical assistance to Microenterprise Development Organizations (MDOs). MDOs then provide loans to microentrepreneurs in rural areas who lack access to capital from traditional lenders for startup and development costs.
“Small businesses are the backbone of our national economy,” said Senator Ricketts. “This legislation would give individuals the opportunity to turn ideas into reality. With stubbornly high inflation, the barriers to entry to start a business are higher than ever before. I’m proud this bill will reward innovation and entrepreneurship in rural parts of the country like Nebraska.”
“We should make it a priority to help entrepreneurs turn their dream projects into reality,” said Smith. “Too often, people trying to start a business in rural communities can’t access the financing they need. This bipartisan legislation would help them get their businesses off the ground with federal loans and technical assistance. I’ll keep working to get it signed into law.”
Nebraska MDOs have received more than $2.2 million in grants to provide technical assistance and $4.5 million in revolving loan funds since 2010.
Currently, loans are limited to 75% of the project cost up to $50,000. The loans are limited to use for certain start-up, expansion, new equipment purchases, or facility improvement costs. This makes it very difficult to utilize existing infrastructure in rural communities. The Rural Microentrepreneur Assistance Act improves the existing program by:
- Modifying the approved use of funds to allow for the renovation of existing buildings, creating an expedient and financially responsible path to update and occupy existing buildings, including those on rural main streets;
- Increasing the percentage of project costs eligible for a loan from 75% to 100% of project costs;
- Increasing the maximum loan amount available to entrepreneurs from $50,000 to $75,000; and
- Extending the program through 2028.
Bill text can be found here.
Companion legislation in the House was introduced by Rep. Zach Nunn (R-IA-4) and Rep. Angie Craig (D-MN-2).