Rep. Cox demands answers from SBA over rural office

Local Congressman claims SBA has not made efforts to fund and staff its Office of Rural Affairs as rural areas stand to lose the most in the economic shutdown

TULARE COUNTY – Rural areas tend to lose more and recover slower from economic crises. The Central Valley had just begun to recover from the Great Recession in 2018, a decade after the housing crash, and are now at the forefront of another and farmers were just coming out of a historic drought last year and are now facing another period of dry winters.

As the economy slides into a medically-induced coma, one local congressman is asking why the federal office that specifically assists rural areas has been completely dismantled.

On April 14, Rep. T.J. Cox (CA-21) and a bipartisan coalition of 28 congressman delivered a letter to Small Business Administration (SBA) Administrator Jovita Carranza asking why the previous director of the SBA’s Office of Rural Affairs is no longer there, if a new full-time director has been appointed, what its staffing and budget levels are and what the SBA is doing to ensure that rural small businesses are being supported during coronavirus pandemic if the office is not operating?

But according to the SBA, it’s fulfilling its mission. Two weeks prior to Cox’s letter, Carranza appointed Dan Nordberg as the acting director of the Office of Rural Affairs. Cox is right in that Nordberg is not a full director, and in fact handles the position’s responsibilities in addition to his role as Region VIII Administrator based out of Denver.  The region covers the states of Colorado, Wyoming, Montana, Utah, North Dakota, South Dakota – over 580,000 square miles – and is the most rural SBA region in the nation.

In a recent email last week, Nordberg told The Sun-Gazette that “while Rural Affairs Director is a key position within the agency, the SBA has over 690 men and women who work in 68 field offices all across the nation serving as the agency’s ‘boots on the ground,’ and the primary contact for delivering SBA’s programs directly to rural communities, businesses, and stakeholders.  SBA staff also work hand in hand with our resource partners at the local level, including Small Business Development Centers (SBDCs), SCORE counselors, Women’s Business Centers, and Veterans Business Outreach Centers to serve the needs of rural small businesses.”

Cox said the Office of Rural Affairs is needed now more than ever to ensure that rural businesses are able to survive the shutdown of the American economy. He said rural businesses sometimes need specialized assistance especially when it comes to information and access to the important SBA programs Congress has implemented.

To address the unprecedented challenges facing small firms, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion stimulus bill containing funding for a wide range of programs designed to help respond to the economic downturn caused by the COVID-19 pandemic. This package provided numerous supports for programs and services through the Small Business Administration (SBA). Yet as the SBA works to implement programs to support small businesses, Cox was concerned to learn that there is no longer a full-time director for the Office of Rural Affairs.

In May 2019, Cox introduced a bill to study why the Office of Rural Affairs had seemingly been dismantled. The office was established in 1990 under Section 26 of the Small Business Act (15 USC 653) to help SBA:

Assist small businesses in applying for financial assistance available through SBA;

Keep track of annual statistics in rural areas, including population, poverty, job creation, and unemployment numbers;

Provide information to industries, organizations, and state and local governments about assistance available to rural small businesses;

Improve the economic opportunities of rural citizens through programs administered by private organizations, educational institutions, and federal, state, and local governments;

Work with the U.S. Tourism and Travel Administration to assist small businesses in rural areas with tourism promotion and development.

SBA responded by appointing Michelle Christian as national director of the Office of Rural Affairs in November 2019. Cox claims that Christian guaranteed that the office would be promptly staffed. “Rural businesses already struggling in today’s economy are being pushed to the breaking point by this crisis. They need help now,” said Rep. Cox. “That is why we need an operational Office of Rural Affairs and why I’m extremely concerned that the SBA has failed to meet their commitment to open and operate this office. The livelihood of millions of working families hangs in the balance.”

Nordberg said SBA District Offices, like the one in Fresno, are working tirelessly to serve rural small businesses. He said district staff are collaborating closely with rural Chambers of Commerce, local governments, and elected officials to provide information on SBA programs via ‘virtual townhalls’, webinars, and Facebook chats.  The SBA has worked to bring in additional lenders to provide Paycheck Protection Program (PPP) loans including credit unions, farm credit lenders, USDA Lenders, community banks, and others that serve rural businesses.  The PPP and Economic Injury Disaster Loan programs are assisting rural businesses, farmers, ranchers, ag co-ops, nonprofits and the faith based groups that serve rural communities.

“Across the country, and around the San Joaquin Valley, SBA’s robust delivery of funding, counseling, contracting, and disaster assistance programs to rural small businesses underscores our agency’s commitment to promoting agriculture and increasing rural prosperity,” Nordberg wrote.

Representatives Abby Finkenauer (IA-01), Greg Steube (FL-17), and Aumua Amata Coleman Radewagen (AS-AL) lead the effort to submit the letter.

“In my remote District, almost all of our employers are small businesses, and economic activity is restricted everywhere right now. Our nation’s small businesses need and deserve strong support through these unexpected difficulties,” said Rep. Aumua Amata Radewagen. “Thank you to Congressman Cox for his leadership on this effort.”

“My district relies heavily on the agricultural industry and it is concerning that the Office of Rural Affairs does not have a full-time director. The SBA needs to protect our farmers, especially during this financial crisis,” said Rep. Greg Steube.

“Our rural small businesses across the country are struggling, and the Office of Rural Affairs is needed now more than ever,” Rep. Finkenauer said in the letter. “We strongly urge that the Office of Rural Affairs receive the full-time staff and resources necessary to support rural small businesses as they struggle to survive the coronavirus pandemic and resulting economic downturn.”

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