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USDA, SBA Agreement Supports Rural Areas
To stimulate business development and job growth in rural areas, officials of the U.S. Department of Agriculture (USDA) and the U.S. Small Business Administration (SBA) signed on Oct. 31 a collaborative agreement to create the Rural Business Investment Program (RBIP). The initiative will allow newly formed venture capital investment companies to leverage private capital funds with government financial assistance and to obtain both government and private grant resources for technical assistance.
RBIP was created by the 2002 Farm Bill with funding through the Commodity Credit Corporation to support $280 million in guaranteed debentures and grants for technical assistance. Under the new agreement, USDA will enlist SBA's expertise in venture capital financing and reimburse SBA for carrying out the day-to-day management and operation of the program. Since 1958, SBA has operated the Small Business Investment Company (SBIC) program, a public-private partnership managing $17.7 billion in more than 10,000 firms across America.
Program officials expect to begin accepting RBIP applications in about six months. SBA has offered to give special consideration to rural applicants in its SBIC program until RBIP is fully operating. More information on program implementation will be published in the Federal Register and available through USDA at http://www.rurdev.usda.gov.