Rural Business Investment Companies
Rural entrepreneurs often require access to funding options other than conventional loans to support growth and development. The U.S. Department of Agriculture’s Rural Business Investment Company (RBIC) licensing program operates to fill that need by allowing banks and venture capital partners to provide patient, more flexible investments for small businesses throughout rural America.
Under the Rural Business Investment Program, RBICs make capital investments with the goal of fostering economic development and increasing job opportunities in underserved rural communities. RBICs are designed to help meet the investment needs in rural areas by making capital investments in smaller enterprises that are unable to access capital from other sources. An RBIC license allows access to the Farm Credit System and eligible entities may apply to operate as a leveraged or non-leveraged RBIC. RBIC funds must invest at least 75% of their capital in rural areas with a population of 50,000 or less, and at least 50% of their investments must be in smaller enterprises, defined as having a net worth of $6,000,000 and net income of $2,000,000 in the preceding two years.
The Small Business Investor Alliance understands that without this crucial access to capital, job growth and rural economic development will continue to lag in prosperity behind urban and suburban areas. Members of SBIA participate in industry councils for sector-specific updates on policy and regulatory matters and educational opportunities. The RBIC Council regularly engages with policymakers about how to effectively expand access to capital for agribusiness entities and rural communities.