Small Rural Businesses Fight for Bailout Aid

By: - June 1, 2020 12:00 am

People wear masks along Main Street in Honesdale, Pennsylvania, as many Wayne County businesses opened late last month for the first time since March. While the federal government has taken steps to support small businesses, some advocates say rural enterprises have been left out. Christopher Dolan/The Scranton Times-Tribune via AP

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Travis Hogman describes himself as a “small fish” who competes with “just about everybody.”

The owner of The Lumberyard in rural, far southwestern Wyoming, squares off with regional rivals like BMC West and heavyweights like Amazon, Lowe’s and Home Depot.

“I fight the small-town mentality all the time,” Hogman said. “We’re always fighting every day for every penny that we get.” 

Over the past several months, small rural businessowners like Hogman have been fighting another battle: getting their share of federal coronavirus aid. 

The trillion CARES Act Congress approved in late March funded several Small Business Administration programs. The Paycheck Protection Program distributed more than billion in forgivable loans to small businesses that retain their employees. It was replenished with another billion. The Economic Injury Disaster Loan program provides small businesses up to ,000 in loan advances that don’t have to be repaid. 

But critics say many rural entrepreneurs have been left out. They say unclear federal guidance has deterred many rural businessowners from applying for help, and that many of them lack the banking relationships necessary to tap the largest pot of federal money: the Paycheck Protection Program.

“The failure of the Paycheck Protection Program to reach rural businesses is the direct result of decades of bank disinvestment from rural communities across the country,” Ines Polonius, CEO of Communities Unlimited, Inc., an Arkansas-based lender that serves small businesses in seven states, told members of a U.S. House subcommittee on small business last month.

Responding to the criticism, the Small Business Administration and Treasury Department late last week announced they would set aside billion in funding for the Paycheck Protection Program to be lent exclusively to Community Development Financial Institutions (CDFIs), which lend to rural, minority and underserved groups.

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April Simpson

April Simpson reports on rural issues at Stateline. Before joining Pew, Simpson was associate editor of Current, where she covered public broadcasting and nonprofit media.