Venture capital offered to rural areas

U.S. Agriculture Secretary Ann M. Veneman and Small Business Administration Administrator Hector V. Barreto last month announced a Bush administration effort to stimulate rural business development and jobs by providing greater access to venture capital investment funds. The SBA, on behalf of USDA,

Veneman said. "This capital will help to create or expand rural business ventures needed for a strong rural economy and job opportunities."

"The RBIP program will help to create an environment in which small rural businesses can grow and create jobs," Barreto said. "President Bush's leadership on this important issue will make a real difference in the lives of small businesses in rural areas."

USDA and SBA will publish guidelines for making application to the new program in the Federal Register. In general, with funding provided by USDA, the RBIP will allow newly-formed venture capital investment companies to leverage private capital funds with government financial assistance and to obtain government grant resources for technical assistance. The RBIP will increase the amount of capital available for investment in rural American businesses, and will provide a new resource for technical assistance to such businesses.

Created by the 2002 Farm Bill, RBIP will license Rural Business Investment Companies (RBICs) to support up to $60 million in guaranteed RBIC debentures based on the Bush Administration's Fiscal Year 2005 budget. The Rural Business Investment Program augments investments already being made in rural areas. By licensing qualified management teams and structuring the RBIP appropriately, this new program can contribute significantly to the federal government's efforts to encourage private risk-taking and investment in rural America.