USDA announces $59 Million in loans and grants to increase economic opportunity, support rural microenterprise development
HURON, SD. – USDA Rural Development Acting Under Secretary Doug O’Brien on Sept 25 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.
In South Dakota:
• Central Electric Cooperative, Inc. based in Mitchell is receiving $300,000 Rural Economic Development Grant to create an economic development revolving loan fund to help Horizon Health Care, Inc., construct a medical clinic in Woonsocket.
• Glacial Lakes Area Development based in Britton is receiving $400,000 RMAP Loan to capitalize a rural microloan revolving loan fund to make microloans to very small businesses in Marshall, Day and Robert Counties.
• GROW South Dakota based in Sisseton is receiving a RMAP Loan of $500,000 and a RMAP Grant of $100,000 to capitalize a rural microloan revolving loan fund to make microloans to very small businesses.
• First Ponca Financial Inc. based in Lincoln and Grand Island, NE is receiving a RMAP Loan of $300,000 and a RMAP Grant of $75,000 to make microloans and provide technical assistance to very small businesses in 12 Nebraska counties, two counties in Iowa and one in South Dakota.
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 the announcement, USDA is providing over $59 million in loans and grants to 78 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.