Shaheen Introduces Legislation to Extend Loan Support to Rural Small BusinessesAugust 09, 2020
**Rural Equal Aid Act expands CARES Act loan relief to Department of Agriculture Rural Development programs**
(Washington, DC) – U.S. Senator Jeanne Shaheen, a senior member of the Senate Committee on Small Business and Entrepreneurship, introduced bipartisan legislation with U.S. Senators Angus King (I-ME), Jon Tester (D-MT) and Mitt Romney (R-UT) aimed at enhancing support for rural communities, family farms and small businesses facing increased fiscal pressures due to the COVID-19 outbreak. The Rural Equal Aid Act would provide relief to rural small businesses by expanding assistance Congress previously provided for certain existing Small Business Administration (SBA) loans to Rural Development (RD) program loans within the United States Department of Agriculture (USDA).
“For years, USDA Rural Development loans have helped rural small businesses and community organizations in New Hampshire develop and expand. However, these important programs lack an important benefit I fought to provide for SBA loans under the CARES Act – six months of forgiveness for all payments of principal, interest and fees. This leaves New Hampshire rural small business owners at a significant disadvantage as they fight to survive this crisis,” said Senator Shaheen. “Our bipartisan legislation would expand this forgiveness feature to include Rural Development loans, ensuring that our rural communities can get the same critical relief others have access to and can keep their doors open.”
Shaheen helped negotiate the small business relief programs established in the Coronavirus Aid, Relief and Economic Security (CARES) Act requiring the SBA to pay the principal, interest, and any associated fees owed on covered loans for a six month period. Under the Rural Equity Aid Act, the USDA would be required 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 our 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.
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