We appreciate Congress’s efforts to draft legislation to deal further with the COVID pandemic and its impact on our nation’s citizens. On behalf of the American Bankers Association, Independent Community Bankers of America, National Rural Lenders Association, and National Rural Lenders Roundtable, representing over 50,000 locations, we write to urge you to ensure adequate funding for key USDA rural development programs in the next COVID bill (American Rescue Plan of 2021).
Specifically, we urge support of provisions such as those included in House Agriculture Committee Ranking Member Thompson’s amendment to fund the USDA’s Business and Industry (B&I) guaranteed loan program through the current fiscal year.
The B&I program is expected to exhaust current funding in the next few months and faces a projected $1 billion shortfall in loan authority this fiscal year. This program is vital to sustaining rural businesses and job creation. The pandemic has strained rural businesses and spiked demand for B&I loans as businesses seek credit to remain viable while working through pandemic related challenges. However, current legislative text for the COVID package does not address this shortfall.
Since this is a guaranteed loan program, a small allocation of approximately only $10 million can resolve the projected $1 billion shortfall in loan authority. Additionally, the B&I CARES Act (BICA) loan program, funded by $20 MM in appropriations, is also nearly exhausted and represents one of the best returns on investment of any government program.
This program should be renewed at its previous level. It would also be very helpful if those with USDA Rural Development guaranteed loans could receive the same CARES Act relief of up to six months of payments as made available to those with existing SBA loans.
The pace of the current fiscal year’s USDA B&I lending is a testament to the success of lenders delivering badly needed capital to rural small businesses. Thank you for your attention to these important programs. If we can provide further information, please let us know.
American Bankers Association
Independent Community Bankers of America
National Rural Lenders Association
National Rural Lenders Roundtable
cc: House Agriculture Committee; House Appropriations Committee