USDA Announces $59 Million in Loans and Grants to Increase Economic Opportunity, Support Rural Microenterprise Development
PIKEVILLE, Ky., Sept. 24, 2014 – USDA Rural Development Acting Under Secretary Doug O'Brien today announced the selection of 85 utilities and development organizations for loans and grants to support rural business activities that will boost economic growth in rural communities.
"These USDA investments capitalize rural small businesses, which allows the owners to expand operations, enter into new markets and increase hiring," O'Brien said. "The investments we are announcing today include financing to development organizations for microlending to very small rural businesses. Funds are also being provided to utilities to pass on to local businesses for development projects. These innovative programs increase economic opportunities in rural areas – a top priority of Secretary Vilsack and President Obama."
O'Brien announced the rural business investments while in Kentucky with Governor Steve Beshear, Congressman Hal Rogers, and the executive board of Shaping Our Appalachian Region (SOAR) to discuss investment opportunities in eastern Kentucky, including Promise Zones and regional SOAR initiatives.
Funds are being provided through the Rural Economic Development Loan and Grant Program (REDLG) and the Rural Microentrepreneur Assistance Program (RMAP). Under the REDLG program, USDA provides zero-interest loans to local utilities which then, in turn, relend the funds to local businesses (ultimate recipients) for projects that will create and retain employment in rural areas. The program funds business start-up or expansion, business incubators, education and training facilities and equipment, community development assistance, health care and other projects that support rural jobs.
Under RMAP, USDA provides loans to Microenterprise Development Organizations (MDOs) that, in turn, make microloans for business start-up or development to eligible microentrepreneurs defined as very small businesses with 10 or fewer employees. Grants are available for MDOs to provide technical assistance and training, particularly in rural areas experiencing persistent poverty or significant outmigration. USDA does not directly provide funds to the ultimate recipients.
The Rural Microentrepreneur Assistance Program was created under the 2008 Farm Bill and recently reauthorized through the 2014 Farm Bill.
The Kentucky Highlands Investment Corporation is receiving a $500,000 RMAP loan to capitalize a revolving loan fund to provide microloans to very small businesses in 19 counties designated by the Appalachian Regional Commission as distressed communities. The Kentucky Highlands Investment Corporation is the lead organization carrying out the state's Promise Zone initiative. Its Promise Zone work was made possible through the financial support from USDA.
MEDI, Inc., is receiving a $400,000 RMAP loan and $100,000 RMAP grant to serve as a microlender and technical assistance provider for very small rural businesses throughout Kentucky.
Since the start of the Obama Administration, Rural Development has invested more than $4.4 billion in Kentucky. The agency is targeting assistance to persistent poverty areas in Appalachian Kentucky through the USDA StrikeForce Initiative for Rural Growth and Opportunity, and will continue its work with Governor Beshear and his staff, the Kentucky Congressional Delegation, other federal agencies, SOAR officials and community leaders throughout the region to benefit rural communities in the impacted areas.
At the national level, the USDA investments are meeting a wide variety of business and manufacturing needs across rural America. For example, in South Carolina, the Santee Electric Cooperative is receiving a $1 million Rural Economic Development loan to support the local "Help My House program," which makes energy efficiency improvements in the rural areas of Williamsburg, Georgetown, Clarendon and Florence Counties. The Nodak Electric Cooperative in North Dakota is receiving a $775,000 Rural Economic Development loan to help S&S Grain, Inc. purchase and renovate a building in Walhalla, N.D., for grain drying, handling and storage.
The Rural Economic Development Loan and Grant program directly supports the Obama Administration's Investing in Manufacturing Communities Partnership (IMCP) initiative to boost the manufacturing sector and create well-paying manufacturing jobs, using economic development resources available through existing Federal programs.
Through today's announcement, USDA is providing over $59 million in loans and grants to 85 organizations in 31 states, including the District of Columbia, to strengthen rural businesses and promote economic development. The funding is contingent upon the recipients meeting the terms of their loan or grant agreements.
President Obama's historic investments in rural America have made our rural communities stronger. Under his leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America's economy, small towns and rural communities.
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