LYONS, Neb. — Rural small businesses and other entities with loans through the U.S. Department of Agriculture could receive six months of loan forgiveness under legislation being considered by the U.S. House of Representatives.
On Monday, the House Agriculture Committee included provisions of the Rural Equal Aid (REA) Act in its proposed Build Back Better Act plan.
The REA Act, a bipartisan measure introduced by Rep. Cindy Axne of Iowa, provides long overdue relief to entities with loans through the USDA Rural Development program. As part of the plan, the USDA will receive $400 million to provide support to businesses with loans through the Rural Microentrepreneur Assistance Program (RMAP) and the Intermediary Relending Program, as well as loans made to public and nonprofit organizations for community facilities, and to businesses, cooperatives, and nonprofits expanding in rural areas. These entities would be eligible for principle, interest, and fee payment forgiveness for up to six months.
If passed, this would be the first time these rural small businesses receive support. Previously, only businesses with loans through the Small Business Administration were eligible for loan forgiveness under the Coronavirus Aid, Relief and Economic Security (CARES) Act. That put rural businesses at a significant disadvantage, according to Johnathan Hladik, policy director for the Center for Rural Affairs.
Hladik said including the REA Act in the Build Back Better Act plan is crucial not only for the business and community entities involved, but also rural America.
“While some rural businesses have rebounded, many more are struggling to recover. Expanding support to these businesses will provide parity for the rural communities that have been hit hardest by the economic impacts of the coronavirus pandemic,” he said. “These entrepreneurs are the leaders that keep Main Street vibrant, making it possible to grow local economies with local dollars. Right now, they need our support.”
After being introduced in both the House and Senate last year, Axne brought forward the REA Act again earlier this year, with support from Reps. Troy Balderson (OH-12), Lisa Blunt Rochester (DE-AL), and Jared Golden (ME-02).
Hladik applauds Axne for championing this important legislation and encourages the full House to approve it as part of the overall bill.
“We urge the remaining members of the House to follow their lead,” Hladik said. “Now is the time to treat rural businesses equally by including them in the Build Back Better Act.”