RMAP provides loans and grants to non-profit organizations, community-based financial institutions, and local economic development councils, which in turn provide technical services and microloans to rural small business owners in their states and local communities.
USDA’s Rural Business-Cooperative Service administers RMAP. The program provides loan capital and technical assistance funding to local and regional organizations that qualify as Microenterprise Development Organizations (MDOs), which in turn provide microloans and business development technical assistance to rural microentrepreneurs.
RMAP defines a “microentrepreneur” as a rural sole proprietorship or business with less than ten employees. Additionally, these potential borrowers are required to show that they cannot obtain funding from other lending sources due to lack of credit or limited business development experience. The microbusinesses must be located in rural areas defined as any area other than a city or town that has a population of greater than 50,000 and the urbanized area contiguous and adjacent to such a city or town according to the latest decennial census.
There are three categories of funding that are available through RMAP:
- Loan capital to MDOs to provide fixed interest rate microloans of less than $50,000 to rural entrepreneurs for the development of microenterprises in rural areas. Loans through MDOs cannot exceed a twenty-year timeframe and need to bear an annual interest rate of at least 1 percent. Each MDO must establish a loan loss reserve fund and keep at least 5 percent of the outstanding loan balance in reserve.
- Technical assistance grants to MDOs to provide marketing, management, and other technical assistance to microentrepreneurs who have already received or applied for an RMAP loan through an MDO. The maximum annual grant award can be no more than 25 percent of the organization’s outstanding microloan balance. This assistance could include but is not be limited to networking, online collaboration and marketing, grant-writing, entrepreneurship workshops or conferences.
- Technical assistance-only grants to MDOs that seek to provide business-based technical assistance and training to eligible microentrepreneurs and microenterprises, but do not seek loan funding.
The federal share of the cost of a microentrepreneur’s project shall not exceed 75 percent, meaning that the MDO must provide or secure the remaining 25 percent from non-federal sources. For any RMAP grant, MDOs must match at least 15 percent of the total amount of the grant in the form of matching funds, indirect costs, or in-kind goods or services.
To be eligible to apply for RMAP funding as an MDO, an organization must be a nonprofit entity, Indian tribe, or public institution of higher education; they must facilitate access to capital; and they must have a demonstrated record or future plan of delivering relevant services.
MDOs are not required to be located in a rural area, but the microentrepreneurs they lend to must be in rural areas.
The Program in Action
Since 2010, USDA has invested $9.5 million in grants and $32 million in loan capital to help 105 MDOs in 41 states provide training, business planning, and market development assistance as well as fixed interest rate microloans to rural micro-entrepreneurs.
RMAP has been used to:
- Help a small business that provides tools and manufactures replacement parts in rural Kentucky hire seven new employees and expand from a 1,000 sq. ft. to a 30,000 sq. ft. facility;
- Leverage additional loan capital through other lending sources to purchase the building space and equipment necessary to modernize a honey bottling facility in Nebraska; and
- Help an organic fruit and vegetable farm in Nevada County, CA transition from selling exclusively through a community supported agriculture (CSA) model to expanding to also sell at farmers markets and a co-op grocery store.
Read more about how RMAP has helped grow jobs in rural communities:
How to Apply and Program Resources
In years in which RMAP has farm bill funding or appropriated dollars, USDA issues Notices of Funding Availability (NOFA). The NOFAs include the amount of funding available and the deadlines by which MDOs must submit their applications.
To apply for funding for RMAP, contact your Rural Development State Office.
Read about the latest news on RMAP on our blog!
Program History, Funding, and Farm Bill Changes
Congress created RMAP in the 2008 Farm Bill. RMAP is one of a handful of farm bill-funded programs that sometimes also receives an annual appropriation as part of the annual agricultural appropriations bill.
The 2014 Farm Bill reauthorizes and provides $3 million in mandatory funding for RMAP each year from 2014 – 2018. The total mandatory funding level of $15 million is the same as under the 2008 Bill; however, the annual amounts are different. The program will need new funding in the next farm bill in order to continue as a farm bill-funded program after 2018.
The most recent farm bill also continues an authorization for Congress to appropriate up to $40 million per year in additional discretionary funding, though the program has not received a discretionary appropriation since 2010. The discretionary funding level for RMAP is determined each year by Congress in the annual agricultural appropriations bill. Future funding cannot be projected as funding levels will be determined a year at a time by Congress. The program last received an appropriation in Fiscal Year 2010 when Congress appropriated $5 million for the program in addition to the mandatory funding the program received through the farm bill.