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Wednesday, July 22, 2020

USDA Cuts Red Tape to Increase Private Investment in Rural America-Hedging the Investor Portfolio Delta County

Rural American, especially the U.P., is an underdeveloped sources of potential national rejuvenation. Personally, I believe that Delta County Michigan is ideally located and has enough shipping infrastructure intact and local know how to make a big difference in regional development. Because regulations can be cumbersome it is hard for businesses and small government entities to make their way through the spaghetti mess to obtain the resources they need. Any process of streamlining and simplifying the process makes sense for getting more "ready to gallop" future CEO horses so to speak through the gate to compete on the global market.

American entrepreneurs want opportunities to compete on the market but have been in a limited position for so long. Helping them through financing and getting them into break out status helps these communities develop home grown talent and business that put the communities back to work. Many of these rural towns were left out of the global market when manufacturing shifted overseas. Helping to launch new ideas and be competitive pays dividends to investors over and over. 

It should be noted that strong investment portfolios balance their risks and rewards to protect assets and position themselves to take advantage of emerging markets. They may have a core conservative batch of companies that don't grow fast or slow but are stable and maintain a minimum growth rate. On the other side, they may want to include more risky but possibly lucrative businesses that have the potential to compete on the market. Covid and the new Cold War with China is changing the calculations. If investors want to maintain their profits they may just want to consider pack investing in multiple businesses in a community that have the highest potential to succeed through environment creation. I'm working on what types of information are likely to attract the most investors for rural communities like Delta County. 

The following is taken from the Congressman Bergman Brief......

USDA Cuts Red Tape to Increase Private Investment in Rural America

Washington - U.S. Secretary of Agriculture Sonny Perdue announced that the United States Department of Agriculture (USDA) is taking steps to increase private investment in rural communities across the country by making it easier for lenders to access four flagship loan programs.

“Under the leadership of President Trump, USDA is committed to cutting red tape and enhancing customer service so we can be a better partner to America’s rural leaders in building prosperity,” Secretary Perdue said. “These enhancements will make it easier for private lenders to use USDA programs to invest in rural businesses and grassroots rural economic development efforts.”

USDA is seeking public comment on a series of regulatory reforms known collectively as the OneRD Guarantee Loan Initiative. Under the initiative, USDA will eliminate duplicative processes and launch a single platform for four key loan programs:

USDA also will standardize requirements for credit reviews, loan processing, loan servicing and loss claims. These measures will make the application process simpler and faster for lenders. Among the reforms, USDA intends to:

  • Launch a common loan note guarantee application and consistent forms for lenders to use across the four programs;
  • Issue loan note guarantees to lenders within 48 hours after they provide documentation to prove the requirements of the conditional commitment have been met;
  • Provide guarantee percentage and fee requirements to lenders through a single annual notice at the beginning of each fiscal year;
  • Allow lenders to obtain approval for a loan guarantee prior to the beginning of construction projects. A one-time fee and other requirements may apply; and
  • Provide automatic approval to lenders in good standing who are supervised or created by state or federal regulatory agencies to participate in all four programs. This expands the base of eligible lenders for the four guaranteed loan programs. Non-regulated lenders may seek approval to participate through a single certification process that will be valid for five years.

USDA plans to conduct a series of listening sessions this summer on the proposed changes. For more information on how to register, visit: www.rd.usda.gov/onerdguarantee.

The changes will take effect on Oct. 1, 2020. Additional information is available in the July 13, 2020, Federal Register (PDF, 896 KB).

Interested parties may join the OneRD Guarantee Loan Initiative subscription list to receive updates from USDA on this regulatory change.

In April 2017, President Donald J. Trump established the Interagency Task Force on Agriculture and Rural Prosperity to identify legislative, regulatory and policy changes that could promote agriculture and prosperity in rural communities. In January 2018, Secretary Perdue presented the Task Force’s findings to President Trump. These findings included 31 recommendations to align the federal government with state, local and tribal governments to take advantage of opportunities that exist in rural America. To view the report in its entirety, please view the Report to the President of the United States from the Task Force on Agriculture and Rural Prosperity (PDF, 5.4 MB).

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov.

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