§2008s Rural microentrepreneur assistance program

Summary

Creates a rural microentrepreneur assistance program that gives loans and grants to help people start and grow very small businesses in rural areas. A microloan is a business loan up to $50,000. A rural microenterprise is a sole proprietor or a business with no more than 10 full-time-equivalent employees in a rural area. A microentrepreneur is an owner or would-be owner who can’t get enough help elsewhere. A microenterprise development organization is a nonprofit, qualifying Indian tribe, or public college that trains and helps rural microentrepreneurs, connects them to money or services, and has a record or plan to serve them. The Secretary makes loans to those organizations so they can make fixed-rate microloans to entrepreneurs. Those loans to organizations can last up to 20 years and must carry at least a 1% annual interest rate. Organizations must keep a loan-loss reserve equal to at least 5% of their outstanding loan balance until they repay the Secretary, and payments may be deferred for up to 2 years. The Secretary also gives grants for training, business planning, marketing, and other help, with priority for areas with heavy out-migration and for diverse and differently sized organizations. Grants for organizations that lend must equal 20–25% of the lender’s outstanding microloan balance (subject to performance and available funds). No more than 10% of a grant may be used for administration. Federal funding can pay up to 75% of a project’s cost, and grant recipients must match at least 15% in cash or in-kind. Organizations must report required information to the Secretary by December 1 each year. Congress authorized $20,000,000 each fiscal year for 2019 through 2023.