SBA to Focus on Rural Communities in 2019
Small businesses prospered in 2018, but the U.S. Small Business Administration says small towns can still use a boost.
The U.S. Small Business Administration (SBA) reported that 2018 was one of the best years for American entrepreneurs and job creators, with highlights including:
- Small-business optimism reached an all-time high. The NFIB Small Business Optimism Index soared to 108.8 in August, a new record in the survey’s 45-year history.
- Unemployment was the lowest on record. In 2018, the number of job openings surpassed the number of job seekers for the first time.
- Government contracts to small businesses set records. In 2018, the federal government met its small business federal contracting goal for the fifth consecutive year awarding 23.88 percent in federal contract dollars to small businesses totaling more than $100 billion.
For 2019, the SBA has announced a new focus on rural communities.
“There still are pockets of the economy that continue to struggle and need help,” said Dan Nordberg, SBA Region VIII Administrator. “Rural communities represent more than just vast farmlands and mountain towns; they are the fabric of our country. Unfortunately, main streets in small town America have struggled in recent years.”
Rural small business challenge #1: Demographic shifts
Many young residents are choosing to leave rural areas to live in urban and suburban areas. Nationally, rural move-outs since 2000 have exceeded move-ins. Rural areas also have a higher share of adults who are ages 65 and older than urban or suburban counties, according to the Pew Research Center.
Rural small business challenge #2: Commodity prices
The agriculture industry is a main source of income for many rural households. Rural economies are significantly impacted by ag commodity prices, and they can have a ripple effect throughout a community if farmers are struggling.
Rural small business challenge #3: Talent acquisition
Rural counties fall behind other types of communities on key measures of employment of prime-age workers (those 25 to 54 years old). Attracting and recruiting qualified talent in rural communities continues to present a significant challenge to small businesses.
Rural small business challenge #4: Lack of access to the internet
In his State of the State address on Jan. 7, Idaho Gov. Brad Little outlined a plan to bolster economic development by helping increase broadband connectivity in rural areas, according to an article in the Idaho Business Review. “I constantly hear how the absence of adequate broadband infrastructure is a deterrent to growth and economic development,” Little said. “I will work with the Legislature to ensure both rural and urban Idaho are connected and well positioned to attract and create maximum success.”
2019: The Year of the Rural Entrepreneur?
Although rural communities will likely face many challenges this year, the SBA’s initiative is promising. According to Nordberg, the SBA “will focus its programs and services toward improving access to capital for small businesses in rural communities as well as a renewed attention to providing business training and access to federal contracts for businesses located in those same areas.”
Vern Eames, Zions Bank’s Gooding, Idaho, branch manager, remains optimistic about the ability of small towns to persevere. “It takes a considerable amount of grit to operate a business in a rural community, and that fact is reflected in how well these individuals and families have withstood through tough economic times and continued to start and run great businesses,” Eames says.
Small businesses in rural communities also rely greatly on residents shopping locally. Contributing to the rural economy as a consumer is critical to the health of these small businesses, and research has shown that choosing independent retailers and restaurants in these communities has significant impact.
It’s too early to tell what this year has in store for the 30 million U.S. small business owners that enrich our communities and fuel our economies. Will 2019 be the year of the rural entrepreneur?
As the top SBA 7(a) lender for 25 years in Utah and 17 years in Idaho, Zions Bank’s team of lending professionals can help you understand U.S. Small Business Administration loan qualifications and find the right SBA loan for your rural small business. Apply online anytime or visit your local Zions Bank branch.