In May of 2014, the United States Department of Agriculture (USDA) announced formation of a new investment fund for assisting development and growth of small business across rural America. Rural America’s population has grown at the fastest rate of any demographic sector within the nation, hence the need for strategic investments. In its announcement, USDA indicated that it stands ready to help rural communities create jobs and continue to be a place where people want to raise their families, noting that “community-level investments are most successful when partnering with folks [that are] already embedded in the local fabric!”
The Rural Business Investment Company fund was formed under the USDA’s Rural Business Investment Program and licenses funds to invest in enterprises that create economic growth and job opportunities in rural areas. It places a specific emphasis on applications from smaller enterprises. In many instances, agriculture, energy, health care, and infrastructure related businesses will qualify for such assistance and will be able to access core private equity investment via a structured application process.
The USDA program enables licensed funds to raise equity capital from Farm Credit System banks, private equity investment firms, agricultural cooperatives, and other associations serving rural areas. The funds must demonstrate that they possess venture capital experience and have also worked successfully in the past with community-based economic development organizations.
To date, the following investments in this new program have been announced:
- Advantage Capital Partners ($150,000,000 in available revenue) will manage investments in innovative agriculture-related business that support USDA’s strategy for economic growth, including bio-manufacturing, local and regional food systems, advanced farming technologies, and other cutting-edge initiatives. The participating Farm Credit institutions include AgStar Financial Services (Mankato, MN), AgriBank (St. Paul, MN), Capital Farm Credit (Bryan, TX), CoBank (Denver, CO), Farm Credit Services of America (Omaha, Neb), Farm Credit Mid-America ((Louisville, KY), and United Farm Credit Service (Willmar, MN)].
- McLarty Capital Partners ($100,000,000 in available revenue) will provide flexible financing solutions to small and medium sized rural enterprises who need the funds to achieve strategic business goals.
- Innova Ag Innovation Fund IVLP ($31,000,000 in available revenue) will source funds for small and medium sized rural and agricultural entities whose focus is on rural economic development.
- Meritus Kirchner Ventures ($100,000,000 in available revenue) will source private equity funds to provide grants and loans to manufacturing, agricultural, health care, and energy enterprises that create jobs in rural America.
- Open Prairie Rural Opportunities Fund is a private equity entity with $100,000,000 in available funds that will source grants and loans to small food enterprises and agricultural industries of small to medium size that are operating within rural areas of the U.S.
The types of activities supported by these equity funds include business development, venture capital pursuit, attracting other private-sector capital, core product enhancement, marketing, and export market assistance These equity and grant development activities are part of the Made in Rural America initiative launched by the USDA in 2008. Its goal is to help rural businesses and leaders avail themselves of new investment opportunities and thereby also access new markets abroad. Readers can access more information about these economic development activities by accessing individual websites (typically formatted as www.name of entity.com) for each of the firms identified above, and by visiting www.rd.usda.gov. .
Funding Available for Technical Education Capacity Building
The National Science Foundation recently announced an Advanced Technology Education Grant Program that will fund institutional capacity to deliver cutting-edge technical education programs. Specific parameters must be met to qualify, however rural areas housing disadvantaged populations are specifically targeted. More details are available at www.nsf.gov. Follow the link “new program announcements” and key in ATE Programs in the “search” box located in the upper right-hand corner of the emerging web page. Program detail will follow.
Funding Available for Economic Development Within Coal Communities
The U.S. Economic Development Administration announced on 06/17/17 that new funding is available for organizations targeting rural economic development within communities impacted by the changing face of coal use. There is no pre-determined list of impacted communities, so presumably North Dakota, Montana, and Wyoming communities could qualify for funding upon submission of a suitable proposal. More details are available at www.eda.gov. The new program is highlighted on the first page to pop up within the website.