The purpose of the RMAP program is to support the development and ongoing success of rural microentrepreneurs and microenterprises. Direct loans and grants are made to selected Microenterprise Development Organizations (MDOs).
How much are the loans?
An MDO may borrow a minimum of $50,000 and a maximum of $500,000 for a single loan under this program in any given Federal fiscal year. In no case will the aggregate outstanding balance, of a single MDO, owed to the Agency exceed $2.5 million. A microborrower that has received financial assistance from an MDO is limited to a loan of $50,000 or less.
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 total outstanding balance of microloans made 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. The maximum amount of TA-only grants will not exceed 10 percent of the amount of funding available for TA-only grants as published annually in the Federal Register.
What organizations are eligible to become an MDO?
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.
Who can apply for loan funds from MDOs?
The following entities are generally eligible to apply for loans from MDOs provided they owe no delinquent debt to the Federal Government:
Individual citizens or individuals who have been legally admitted to the U.S.,
Those located in a rural area defined as an area of a State not in a city or town that has a population of more than 50,000 inhabitants and the contiguous and adjacent urbanized area.
A microentrepreneur, or microenterprise as defined is a business entity with not more than 10 full-time equivalent employees that is in need of $50,00 or less in business capital and/or in need of business based technical assistance and training.
What types of projects are eligible?
RMAP funding may be used to provide fixed interest rate microloans to rural microentrepreneurs for startup and growing microenterprises. Eligible MDOs will be automatically eligible to receive microlender technical assistance grants to provide technical assistance and training to microentrepreneurs that have received or are seeking a microloan under RMAP. Technical assistance-only grants (for technical assistance and training) may be made to MDOs that have sources of funding other than RMAP funds for making or facilitating microloans. Some examples of eligible projects are:
Loans:
Working capital
Purchase of furniture, fixtures, supplies, inventory or equipment
Debt refinancing
Business acquisitions
Purchase or lease of real estate that is already improved and will be used for the location of the subject business only (construction of any type is strictly prohibited)
Technical Assistance Grants:
Provision of education, guidance, or instruction to one or more rural microentrepreneurs to:
prepare them for self-employment;
improve the state of their existing rural microenterprises;
increase their capacity in a specific technical aspect of the subject business; and,
assist a rural microentrepreneur in achieving a degree of business preparedness and/or functions that will allow them to obtain or have the ability to obtain business loans independently.
Each year, Congress provides program funding as called for in the Federal Budget. Fiscal Year funding levels will be made available as soon as possible after the beginning of each Fiscal Year.
