WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) today joined a bipartisan group of his colleagues in introducing legislation aimed at enhancing support for rural communities, family farms and small businesses facing increased fiscal pressures due to the COVID-19 outbreak. King, along with U.S. Senators Jon Tester (D-Mont.) and Mitt Romney (R-Utah) are leading 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). In addition to King, Tester, and Romney, the Senators’ bipartisan bill is also cosponsored by U.S. Senators Jeanne Shaheen (D-N.H.), David Perdue (R-Ga.), and Chris Coons (D-Del.).

“When Congress passed the CARES Act, we included provisions to reduce loan burdens for small businesses across the country,” said Senator King. “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.”

“We have borrowers in rural Maine communities for whom the Rural Equal Aid Act will be a godsend,” said Laura Buxbaum, SVP, Policy and Resource Development, Coastal Enterprises, Inc. (CEI). “We know that they are struggling and will redirect their payments to cover loss of revenue and new opportunities that can help their businesses survive.”   

Under the CARES Act, the SBA is required to pay the principal, interest, and any associated fees owed on covered loans for a six month period – under King’s bill, 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.

With the coronavirus pandemic changing the way our nation operates, Senator King has pushed to make sure rural communities are not left behind. Yesterday, he introduced legislation that would create thousands of rural jobs and support rural economies by investing in job training and development, rangeland and working lands conservation programs, and the planting of billions of trees. He has been focused on supporting rural communities since the beginning of the crisis, taking part in a telephone press conference during “Rural Healthcare Week” in April to highlight the pandemic’s effect on rural communities. He has pushed to support telehealth and the USPS, both of which are a critical components of the healthcare delivery system for rural Americans.