Tester, Romney, King Lead Legislation to Extend Loan Support to Small Businesses
Rural Equal Aid Act expands CARES Act loan relief to Department of Agriculture Rural Development programs
U.S. Senator Jon Tester is teaming up with a bipartisan group of his colleagues on a bill that would enhance support for rural communities, family farms, and small businesses during the COVID-19 outbreak.
Tester and Senators Mitt Romney (R-Utah) and Angus King (I-Maine) are sponsoring the Rural Equal Aid Act to 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).
“Small businesses across Montana are hurting, and they need all the support they can get to weather this storm,” Tester said. “This bipartisan legislation will help small businesses and family farms keep the lights on by providing critical resources to communities hit hardest by the pandemic, and make sure folks in rural Montana don’t get left behind during this public health crisis.”
“Small businesses and community organizations are vital to the health and livelihoods of Utah’s rural communities, and they have faced great hardship over the last several months,” Romney said. “Our legislation will help them receive the support they need to keep their doors open and get through this pandemic.”
“When Congress passed the CARES Act, we included provisions to reduce loan burdens for small businesses across the country,” King said. “This was the right move, but by excluding USDA Rural Development loans from the program, the effort left out many rural businesses that are feeling the same pain. Now, as Congress considers the next coronavirus relief package, we should extend these protections to ensure that our rural communities can access the same type of support as the rest of the country.”
The CARES Act requires the SBA to pay the principal, interest, and any associated fees owed on these covered loans for a six month period, and the Senators’ bill would require USDA 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 rural communities.
Tester’s 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.
Tester’s bill won praise from groups across Montana:
“Bank of the Rockies is the oldest bank in Montana and we have assisted Montana business utilizing the Rural Development Guarantee programs. This legislation would provide needed assistance for these business during these trying economic times,” said Bank of the Rockies Vice President Heather Malcolm. “On behalf of Bank of the Rockies, and as Chair of the ABA Ag & Rural Bankers committee, we support this legislation.”
“Your legislation is precisely the right approach to increasing the likelihood more rural small businesses will survive and create jobs and opportunity in small towns and farming communities across America,” wrote a group of Community Development Financial Institutions including MoFi. “We are pleased to offer our support.”
Other groups supporting Tester’s bill include the National Rural Health Association, the Independent Community Bankers Association, and the American Bankers Association.
The Senators’ bipartisan bill is cosponsored by U.S. Senators Jeanne Shaheen (D-N.H.), David Perdue (R-Ga.), and Chris Coons (D-Del.).
Throughout the COVID-19 crisis, Tester has been an unwavering advocate for Montana business owners. He recently announced $65 million in community development tax credits to help support Montana small businesses. He also helped create the Paycheck Protection Program (PPP) in the CARES Act to help small businesses stay afloat, and he has been fighting to improve the program ever since. He recently introduced the Reviving the Economy Sustainably Towards a Recovery in Twenty-twenty (RESTART) Act to create a long-term loan program that targets small- and mid-sized businesses devastated by the public health crisis, and successfully secured expansions to the PPP allowing electric co-ops and rural hospitals to qualify for relief.
The full text of the bill can be found HERE.