New RMAP Program to Support Rural Small Business

The Rural Microentrepreneur Assistance Program is a new program that will make grants to organizations that provide training, technical assistance or make small loans to new and existing rural small businesses. This program will provide grants and loan funds to organizations that provide training, technical assistance and/or small loans to rural small business owners, facilitate access to capital and access to services for rural microenterprises.

The funding is channeled to three areas:

  • Loans to microentrepreneurs through applicant organizations: Funds to provide fixed interest rate microloans of less than $50,000 to rural entrepreneurs for the development or start-up of successful microenterprises in rural areas.
  • Grants to organizations to assist microentrepreneurs (connected to loan funds): Funding to organizations to provide marketing, management, and other technical assistance to microentrepreneurs who received or are seeking a loan from the microenterprise development organization.
  • Grants to support microenterprise development (not connected to loan funds): Funding to organizations to provide training, operational support, business planning, market development assistance, and other services to rural entrepreneurs.

The Rural Microentrepreneur Assistance Program program will be administered as a national program through USDA Rural Development’s Business Programs Office.

Organizations eligible to apply for funding include nonprofit organizations, public institutions of higher education, and tribal governments that are not served by a nonprofit development organization.

Applicants should have a demonstrated record of delivering services to rural microentrepreneurs or an effective plan to develop such a program. Applicant organizations do not need to be located in a rural area, but they must serve rural entrepreneurs. Microenterprises can be food or agriculture-related but are not required to be.

The farm bill defines organizations meeting the above qualifications as Microenterprise Development Organizations (MDO).

Applications must meet the following standards:

  • Federal share of the cost of a project funded by this program shall not exceed 75%
  • MDOs must match at least 15% of any grant amount
  • Not more than 10% of any grant received may be used for administrative expenses

Definitions:

  • Microentrepreneur: an owner and operator or prospective owner or operator of a rural microenterprise unable to obtain sufficient training, technical assistance or credit
  • Microloan: a business loan of not more than $50,000
  • Rural: any area other than 1) a city or town with 50,000 or greater population, or 2) an urbanized area contiguous or adjacent to a city or town with 50,000 or greater population
  • Rural Microenterprise: sole proprietorship or business with no more than 10 full-time equivalent employees
  • Microenterprise development organization (MDO): an organization that is a nonprofit entity, Indian tribe (that is not served by an MDO), or public institution of higher education that provides training and technical assistance to rural microentrepreneurs, facilitates access to capital and services to rural microenterprises and has a demonstrated record of delivering services to rural microentrepreneurs or an effective plan to develop such a program.

Funding Opportunity Number: RDBCP-10-RMAP
Current Closing Date for Applications: Jul 16, 2010
Archive Date: Aug 16, 2010
Funding Instrument Type: Grant
Expected Number of Awards: 35
Estimated Total Program Funding: $8,900,000
Award Ceiling: $130,000

Additional Information on Eligibility:
Non-profit entities, Indian tribes, and public institutions of higher education that, for the benefit of rural microentrepreneurs and microenterprises, provides training and technical assistance, makes microloans or facilitates access to capital or another related service, and/or has demonstrated record of delivering, or an effective plan to develop a program to deliver such services.

Eligible MDOs will automatically be eligible to receive technical assistance grants to provide technical assistance and training to microentrepreneurs that have received or are seeking a microloan under the RMAP. These grants are limited to an amount equal to not more than 25 percent of the loan to an MDO under the RMAP. Technical assistance-only (TA-only) grants will competitively be made to MDOs for the purpose of providing technical assistance and training to prospective borrowers. TA-only grants will be made to eligible MDOs that seek to provide business-based technical assistance and training to eligible microentrepreneurs and microenterprises, but do not seek funding for a direct loan under RMAP.

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New RMAP Program to Support Rural Small Business

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