Streamlining and Coordinating Support for Rural Small Businesses - Sep 13, 2024
Sources
https://www.sbc.senate.gov/public/index.cfm/hearings?ID=CCB8BC14-23F0-4C4A-A3E2-D8D6F51E6A01
Summary
Several programs and initiatives exist to support small businesses, especially in rural areas. These initiatives focus on financial assistance, technical support, and addressing specific challenges like disaster recovery and energy costs.
Financial Assistance Programs:
Rural Energy for America Program (REAP): This USDA program provides funding for renewable energy projects and energy efficiency upgrades. Grants cover a portion of project costs, with increased federal support under the Inflation Reduction Act. Maximum grant amounts vary. REAP aims to lower energy costs for businesses, with examples demonstrating significant savings through energy-saving measures.
Small Business Administration (SBA) Loans: The SBA offers direct loans and disaster recovery programs to support small businesses.
Community Bank Loans: Community banks provide loans, often with more favorable terms and faster approval times than federal options, and are particularly crucial after natural disasters.
Community Development Finance Authority (CDFA): The CDFA offers grants to assist businesses in applying for REAP energy efficiency funding.
Technical Assistance Programs:
Energy Circuit Rider Programs: These programs offer on-the-ground technical assistance to communities, small businesses, and farmers, helping them navigate funding opportunities and access programs like REAP.
Clean Energy New Hampshire (CENH): CENH provides free technical assistance to rural small businesses and agricultural producers, assisting with energy audits, funding opportunities, and grant applications.
Small Business Development Centers (SBDC): SBDCs provide assistance with various aspects of business, including creating business plans and advising on loans. They also offer programs to help businesses navigate exporting their products or services.
Specific Initiatives and Support:
Memorandum of Understanding (MOU): The SBA and USDA signed an MOU to increase collaboration between the agencies, aiming to address gaps in capital access, contracting opportunities, and entrepreneurial development resources for rural small businesses.
Path to Prosperity Workshops: These joint regional economic development workshops connect rural small businesses with government officials, lenders, service providers, and other stakeholders.
State-Level Programs: Some states have developed their own programs to support small businesses, such as Iowa's Disaster Recovery Farm Interest Program.
Addressing Challenges:
Broadband Access: Expanding broadband internet access in rural areas is crucial and should be treated as a utility to ensure equitable access.
Disaster Recovery: Federal programs provide critical support to businesses after natural disasters, though coordination between agencies can be challenging.
Regulatory Burdens: Overregulation can negatively impact small businesses, particularly in rural areas.
Inflation: Inflation has significantly impacted the costs of operating a business and has increased the need for disaster programs.
Coordination of agencies: Challenges exist in the coordination between agencies such as USDA and SBA. The MOU seeks to address these issues, but gaps in communication and service delivery still persist.