SBA’s Rural Activities — Congressional Research Service IF12639 (Updated December 15, 2025)

Summary

This Congressional Research Service report by Adam G. Levin, updated December 15, 2025, reviews the SBA’s rural activities. Citing the SBA Office of Advocacy, it says nearly 97% of establishments outside metropolitan areas are small businesses employing roughly 57% of workers there. Congress authorized an SBA Office of Rural Affairs in 1990, but the office appears to have been mostly dormant since. The SBA and the U.S. Department of Agriculture signed a memorandum of understanding in April 2018 on joint training, exporting help and collaboration for rural small businesses.

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“SBA’s Rural Activities — Congressional Research Service IF12639 (Updated December 15, 2025).” Original at www.congress.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/congressional-research-service-if12639-3-sba-s-rural-activities-4e4408bf54/, SHA-256 22cfdb8656f7eabc0b294378b352bffaf2c7493bce55532dd209247a92a80192.

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Updated December 15, 2025
SBA’s Rural Activities
The U.S. Small Business Administration’s (SBA’s) mission groups and/or geographies that traditionally have difficulty
is to “aid, counsel, assist, and protect” the interests of small obtaining R&D funding and investment capital, such as
businesses. While SBA generally helps small businesses rural communities.”
regardless of location, small businesses may constitute a
larger proportion of businesses in rural areas. According to SBA’s FY2025 budget request identified several areas
SBA’s Office of Advocacy (Advocacy), as of September where SBA intended to expand its assistance to rural small
2025, nearly 97% of establishments outside metropolitan businesses. The budget request noted that SBA’s
areas are small businesses, and those small businesses Historically Underutilized Business Zone (HUBZone)
employ roughly 57% of workers in those areas. However, contracting preference program “will continue to work with
rural small businesses can face particular challenges. governors’ offices to expand the program’s reach to rural
According to the same Advocacy study, small businesses’ areas across the country through a new category of
share of employment outside of metropolitan areas fell by HUBZones known as ‘Governor-Designated Covered
nearly 2% between 2012 and 2025. Areas.’” The budget request also stated that SBA would
work with the U.S. Department of Agriculture (USDA), the
Some Members of Congress have stated that SBA should Department of Commerce, and other federal agencies to
expand services to rural small businesses. Members of the “assist small businesses in rural areas to increase their
119th Congress have introduced several bills pertaining to participation in exporting, government procurement,
SBA’s rural activities. Some of these bills focus on SBA’s tourism, access to credit, incubators, innovation,
Office of Rural Affairs (ORA). Congress authorized ORA technology, and other small business programs.”
in the Small Business Administration Reauthorization and
Amendments Act of 1990 (P.L. 101-574), but the office SBA and USDA Cooperation
appears to have been mostly dormant since. SBA has previously worked with USDA on issues
concerning rural small businesses. The two agencies signed
Selected SBA Programs for Rural Small a memorandum of understanding (MOU) in April 2018.
Businesses The MOU stated that SBA and USDA had mutual interests
SBA programs with preferences targeting rural small in issues including “improving investment opportunities in
businesses include programs with preferences established in rural areas” and “aiding rural businesses in providing tools
law and those without such statutory language. The statute to export products around the world.” Among other
authorizing SBA’s State Trade Expansion Program, (STEP; activities, the MOU established that SBA and USDA may
15 U.S.C. §649(l)), which makes grants to states to help work together to
expand the number of small business exporters and the
dollar value of those exports, says that SBA may prioritize • provide joint trainings and technical assistance for rural
STEP applications from states proposing a program that small business owners;
“demonstrates intent to promote trade expansion” by rural • help rural small businesses find export chances; and
small businesses, among other entities.
• expand collaboration between the USDA Rural Partners
Similarly, the statute authorizing the Federal and State Network and SBA’s resource partners, which provide
Technology Partnership Program (FAST; 15 U.S.C. §657d), management and technical assistance to small
which awards grants to entities to increase Small Business businesses.
Innovation Research (SBIR) and Small Business The MOU also established interagency working groups to
Technology Transfer (STTR) program applications from examine capital access and investment in rural areas and
certain small business owners, says that SBA “shall how to grow businesses in rural areas. The MOU expired in
consider” whether a FAST application “addresses the needs April 2023, but SBA and USDA signed a new, nearly
of” small businesses “located in areas that have historically identical MOU in October 2023. As of December 2025, the
not participated in SBIR and STTR programs.” SBA has working groups have not produced any publicly available
clarified in FAST notices of funding availability that this reports. Separately, in June 2025, news reports suggested
provision typically refers to rural states. the Trump administration was considering moving three
USDA capital access programs to SBA.
SBA’s Growth Accelerator Fund Competition (GAFC),
which makes grants to entities assisting small businesses SBA’s Office of Rural Affairs
and startups working in the science, technology, Congress authorized SBA’s ORA in the Small Business
engineering, math, and research and development (R&D) Administration Reauthorization and Amendments Act of
fields, does not have specific statutory authority. However, 1990 (P.L. 101-574). ORA’s statutory purposes include
SBA’s FY2025 budget request noted that GAFC “identifies

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SBA’s Rural Activities

• achieving an equitable distribution of financial Appalachian Regional Commission and Delta Regional
assistance available for rural small businesses; Authority to develop activities to expand rural
entrepreneurship in the Appalachian and Mississippi Delta
• compiling annual statistics on rural areas, including
population, poverty, job creation and retention, regions. Similarly to H.R. 4549, the Coordinated Support
unemployment, business failures, and business startups; for Rural Small Businesses Act (S. 1093) would also
require SBA to appoint an Assistant Administrator in
• providing information to industries, organizations, and charge of ORA and mandate ORA to conduct outreach to
state and local governments concerning the federal rural small businesses. The bill would also direct the ORA
assistance available to rural small businesses; and Assistant Administrator to convene working groups to
• assisting rural small businesses with tourism promotion identify issues overlapping between SBA and USDA. In
and development. addition, the Rural Small Business Resilience Act (S. 1703
and H.R. 804) would require the associate administrator of
ORA has been largely inactive despite its statutory SBA’s Office of Disaster Recovery and Resilience to
authorization. The office has not received funding in annual ensure that individuals in rural areas where a disaster has
appropriations bills since its authorization (Congress funds been declared have full access to SBA disaster assistance.
SBA through appropriations bills). In July 2019, 16 H.R. 804 passed the House in February 2025.
Members of Congress signed a letter to the acting SBA
administrator requesting information on why ORA was Considerations for Congress
never fully established. SBA does not appear to have Congress has expressed interest in increasing aid to rural
publicly responded to the letter. small businesses. For instance, in the 119th Congress, the
committee report for the Financial Services and General
In the 116th Congress, the committee report for the Government Appropriations Act, 2026 (H.R. 5166) stated,
Financial Services and General Government Appropriations “The Committee recognizes the importance of access to
Act, 2021 (H.R. 7668) directed SBA to submit a report on capital for small businesses, especially in rural
ORA, “detailing the Office’s mission, strategic plan, and communities.” However, in some cases where SBA
staffing and resource requirements, including the costs and programs have requirements to focus on or target rural
potential benefits of establishing an Associate small businesses, these requirements have not necessarily
Administrator position for the Office.” In the 117 th resulted in increased resources to rural small businesses.
Congress, the committee report for the Financial Services For example, the Community Advantage (CA) Pilot
and General Government Appropriations Act, 2023 (H.R. Program included rural areas as one type of market that
8254) stated, “The Committee is dismayed that SBA has yet counted toward the requirement that a CA lender make at
to submit the report required in H.Rept. 116-456 on the least 60% of its loans to underserved markets. But in
Office of Rural Affairs, and expects SBA to expeditiously FY2023, a lower share of CA loans went to rural businesses
submit this long-overdue report.” As of December 2025, the than did 7(a) loans processed through other methods that do
report is not publicly available. not have any incentive or requirement for rural lending.
(SBA transitioned the CA Pilot Program to a permanent
Recent Legislative Activity program in October 2023.) Congress could study the
Some Members of the 119th Congress have proposed bills effectiveness of such rural requirements or incentives.
concerning SBA’s rural activities. The Investing in All of
America Act of 2025 (H.R. 2066 and S. 1917) would ORA appears to not have had a director for most of the time
expand the amount of money that may be excluded from the since its authorization. SBA’s leadership website does not
calculation of the limit on financing that SBA provides to list any staff associated with ORA. ORA’s lack of activity
Small Business Investment Companies (SBICs; for more was noted in the committee report for H.R. 5425 in the
information, see CRS Report R41456, SBA Small Business 118th Congress, which stated, “The Office of Rural Affairs
Investment Company Program). The excludable amount has been historically underutilized by the SBA.” As noted,
would include amounts an SBIC invests in, among other in the 119th Congress, H.R. 4549 and S. 1093 would require
criteria, rural areas. H.R. 2066 passed the House in SBA to appoint an Assistant Administrator in charge of
December 2025. ORA. Congress may have interest in monitoring
developments concerning ORA.
Another bill, the Office of Rural Affairs Enhancement Act
(H.R. 4549) would require SBA to appoint an Assistant Rather than keeping ORA as a standalone office within
Administrator to head ORA. The bill would also require SBA with its own leadership, Congress could also decide to
ORA to conduct outreach events for small businesses in fold ORA into one of SBA’s existing departments. Options
rural areas in collaboration with SBA resource partners for this could include SBA’s Office of Capital Access or
providing management and technical assistance to small Office of Entrepreneurial Development, although those
businesses, such as Small Business Development Centers. offices tend to operate their own programs. Based on
H.R. 4549 would also require ORA’s Assistant ORA’s statutory language, managing programs may not be
Administrator to annually submit a report on the office’s the purpose of ORA as much as it is SBA-wide
activities to the Senate Committee on Small Business and coordination. Another option may therefore be to place
Entrepreneurship and House Committee on Small Business. ORA within SBA’s Office of the Administrator.
The bill passed the House in December 2025.
Adam G. Levin, Analyst in Economic Development Policy
Also in the 119th Congress, the GREATER Act (H.R. 2728)
would require SBA to enter into an MOU with the
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SBA’s Rural Activities

IF12639

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