In comparison to their urban counterparts, rural businesses arguably face more challenges in launching and growing their enterprises. Because they are in rural areas with fewer resources, rural businesses often have difficulties in securing funding and growing their markets. Most rural communities lack resources such as accelerators, incubators or other organizations that provide access to expertise, technical assistance and other resources. This makes it tough to find funding for rural startups.
To address this gap the U.S. Department of Agriculture has created the Rural Business Development Grant (RDBG) program. The USDA designed the RDBG program to RBDG to enable rural entities in providing technical assistance, training and other activities that support the development or expansion of small and emerging businesses in rural communities. To qualify as small or emerging, a business must have fewer than 50 employees and less than $1 million in gross revenues. Programmatic activities are separated into enterprise or opportunity type grant activities.
The USDA defines a rural area as a community that has a population of less than 50,000 persons and is outside the urbanized periphery of any city with a population of 50,000 or more.
How much grant funding is available?
According to the USDA, RDBG grants range in size from $10,000 up to about $500,000. However, the USDA also says that smaller requests are given higher priority. There is no cost sharing requirement.
Who is eligible to receive a RDBG grant?
The USDA does not award RDBG grant funds directly to small businesses, startups or early-stage firms. Instead, the funds are awarded to any of the eligible entities outlined below. The recipients then use the funds to provide technical support and assistance to eligible businesses in their home communities. Eligible RDBG applicants include:
- State agencies
- Nonprofit Corporations
- Institutions of Higher Education
- Federally-recognized Tribes
- Rural Cooperatives
What kinds of activities do RDBG grant funds support?
RDBG funds can be used to support a range of activities including (but not limited to):
- Providing training and technical assistance
- Capitalization of revolving loan funds, including funds that make loans for startups and to provide working capital
- Community economic development
- Leadership and entrepreneur training
- Rural business incubators
- Feasibility studies and business planning
- Long-term business strategic planning
If you are interested in learning more about the RDBG grant program and how it can provide funding for rural startups, visit the USDA website.