Axne Leads Bipartisan Legislation to Provide Loan Relief for Rural Communities
Today, Rep. Cindy Axne (IA-03), Rep. Lisa Blunt Rochester (DE-AL), Rep. Jared Golden (ME-02) Rep. Troy Balderson (OH-12), Rep. Austin Scott (GA-08), and Rep. Scott Tipton (CO-03), introduced legislation to provide relief to borrowers using U.S. Department of Agriculture's (USDA) Rural Development loans during the ongoing coronavirus (COVID-19) pandemic and economic downturn. Sen. Jon Tester (MT), along with Sen. Angus King (ME), Sen. Mitt Romney (UT), Sen. Jeanne Shaheen (NH), Sen. Chris Coons (DE), and Sen. David Perdue (GA) are leading the companion bill in the Senate.
In March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included 6 months of payments for borrowers with existing Small Business Administration (SBA) loans, but similar relief was not given to borrowers with loans through USDA's Rural Development programs.
The Rural Equal Aid Act, introduced today in both the House and Senate, would give USDA borrowers the same relief already provided to small business and nonprofit borrowers using SBA loans.
"Our rural businesses have been under the same burdens and weathering the same storm since the beginning of COVID-19. It is only fair that we extend them the same provisions to sustain them through challenging economic times," said Rep. Axne. "I'm proud to lead this bipartisan group to unveil this legislation in both chambers of Congress this week, and I urge congressional leadership to include this commonsense measure in the discussions of the next round of essential COVID-19 aid."
The Rural Equal Aid Act would make 6 months of payments for rural small businesses and nonprofits using four USDA loan programs:
Community Facilities loans, which are loans made 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 loans made to small businesses, cooperatives, and nonprofits to develop and expand businesses in rural areas.
Two loan programs made through small local intermediaries. The borrowers from these programs are often unable to access other credit, and may have been unable to use the Paycheck Protection Program because they don't have existing banking relationships.
The Intermediary Relending Program, which provides loans of no more than $250,000 made 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.
The Rural Microentrepreneur Assistance Program (RMAP), which offers loans of no more than $50,000 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.
"COVID-19 has hit small communities hard, and we are seeing rural businesses struggle every day -- but up until this point, they have not received the same legislative support as their urban counterparts," said Johnathan Hladik, Policy Director at the Center for Rural Affairs. "We applaud Rep. Axne and her colleagues for recognizing this oversight and having the leadership it takes to level the playing field."
"Rural communities have been hit especially hard by the negative impacts of the COVID-19 outbreak, and it is vital that businesses in rural communities have access to resources to help them keep their doors open and employees on payroll during this time," said Rep. Austin Scott. "That's why I am proud to join my colleagues in pushing for additional resources for USDA's Rural Development Loan program. Rural Americans are resilient, and we will weather these unprecedented times together."
"The Rural Equal Aid Act will provide essential support to our rural communities as Delaware and our country continues to combat the ongoing economic impacts of the COVID-19 pandemic," said Rep. Blunt Rochester. "I am proud to join Congresswoman Axne on this important legislation. As Delawareans know, small businesses are the backbone of our rural communities. 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."
"Many Coloradan businesses have had access to temporary relief for their existing SBA loans but unfortunately, many others were not eligible due simply to the types of loans they had," said Rep. Scott Tipton. "Congress must ensure that rural communities have equal access to relief to offset some of the enormous financial losses from the ongoing pandemic. I'm proud to sponsor this bill that will help our rural hospitals, coops, and job providers better shoulder the burden of the pandemic."
"In March, Congress helped thousands of urban small businesses weather the COVID-19 crisis by offering relief for payments on their SBA loans," said Rep. Jared Golden. "But it neglected the many rural small businesses that count on loans through the USDA and have struggled just as much over the last six months. I am joining my colleagues to introduce this bipartisan bill today to help rural small businesses stay afloat during the COVID-19 crisis and make sure they have the same opportunities as businesses in urban areas."
"Ohio's rural communities have been some of the hardest hit by this pandemic, and their needs cannot be overlooked in our relief efforts," said Rep. Troy Balderson. "It's critical they have equal access to relief through USDA to ease the burden caused by recent financial losses so they can remain strong through this crisis and beyond."
The bill is also supported by the American Bankers Association, Independent Community Bankers Association, Iowa Bankers Association, National Rural Health Association, National Rural Housing Coalition, and the National Association of Towns and Townships.