[Federal Register Volume 84, Number 167 (Wednesday, August 28, 2019)]
[Rules and Regulations]
[Pages 45060-45061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18609]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 120
504 Loan Program Rural Initiative--Extension of Pilot Program
AGENCY: U.S. Small Business Administration.
ACTION: Notification of extension of 504 Loan Program Rural Initiative
Pilot Program.
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SUMMARY: The 504 Loan Program Rural Initiative Pilot Program (504 Rural
Pilot) authorizes Certified Development Companies (CDCs) to make 504
loans for projects in rural counties located in their Small Business
Administration (SBA) Region during the two-year period beginning July
19, 2018 and ending July 20, 2020. The SBA announces the extension of
the 504 Rural Pilot to September 30, 2021.
DATES: The 504 Rural Pilot, including the waiver of the restrictions in
13 CFR 120.839 on the CDC's authority to make loans outside their Area
of Operations, is extended through September 30, 2021.
FOR FURTHER INFORMATION CONTACT: Linda Reilly, Chief, 504 Program
Branch, Office of Financial Assistance, U.S. Small Business
Administration, 409 Third Street SW, Washington, DC 20416; telephone:
(202) 205-9949; email address: [email protected].
SUPPLEMENTARY INFORMATION: On July 19, 2018, SBA announced the
availability of the 504 Rural Pilot for a two-year period, through July
20, 2020. See 83 FR 34021. In the notification, SBA explained that
there has been a significant decline in the number of rural CDCs since
2013 and that SBA developed the 504 Rural Pilot to increase 504 lending
in rural areas by allowing CDCs to make loans outside their Area of
Operations. Specifically, the 504 Rural Pilot allows CDCs to make loans
for 504 Projects with an address located in any county classified as
``rural'' by the U.S. Census Bureau if the 504 Project is located in
the same SBA Region in which the CDC is incorporated.
Between July 19, 2018 and June 1, 2019, eight loans, in the
aggregate amount of $2,983,000, have been approved under the 504 Rural
Pilot. These loans range in size from $70,000 to $1,036,000 and are
providing assistance for projects located in communities with
populations that range in size from 276 to 34,538. From the size of the
communities served, the pilot is beginning to reach communities that
are hard to serve due to population size.
SBA would like to extend the time period of the 504 Rural Pilot to
give CDCs more time to market the 504 Program in eligible rural areas.
Because it takes time and additional investment for CDCs to market in
new areas, CDCs have requested that the pilot be extended. By providing
more time for CDCs to develop loan awareness and activity in the rural
communities within their regions, SBA hopes that CDCs will be able to
generate more new loans to assist rural businesses. Accordingly, SBA
has decided to extend the pilot through September 30, 2021.
In addition, for purposes of this pilot, a rural county is
currently defined as a county classified as ``mostly rural'' or
``completely rural'' by the U.S. Census Bureau in its most recent
decennial census report. SBA is hereby modifying the definition of a
``rural county'' for purposes of this pilot to include any county that
the U.S. Census Bureau classifies as greater than or equal to 30% rural
in its most recent decennial census report. This definition will apply
to any loan approved on or after August 28, 2019 under this pilot.
These counties are identified in the County Classification Lookup Table
that can be downloaded at https://www.sba.gov/about-sba/sba-initiatives/sba-rural-lending-initiative or on the Welcome Screen for
the Capital Access Financial System (CAFS). SBA believes that the
expanded definition of ``rural county'' will encourage more lending
through the pilot and will bring capital to these underserved areas.
Further, this change will align this pilot with the definition of rural
that is used in the 7(a) and 504 loan programs. CDCs must continue to
use the U.S. Census Bureau table for purposes of identifying the rural
counties that are eligible for the 504 Rural Pilot. The terms and
conditions of the pilot are otherwise unchanged.
As described in the original notification of this pilot (see 83 FR
34021), SBA will continue to use the following criteria to evaluate the
504 Rural Pilot to determine how well it is achieving its objectives
and other aspects of performance: (1) The measurable objectives to be
achieved through the 504 Rural Pilot, including the number of small
business concerns served, and the delinquency and default rates on the
504 Rural Pilot loans compared to regular 504 loans; (2) the
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number of CDCs that participate in the 504 Rural Pilot and their
performance in making and servicing 504 Rural Pilot loans; and (3) the
costs and standards of performance which, in order to be acceptable,
must not impact the overall subsidy rate for the 504 Loan Program.
Authority: 13 CFR 120.3.
Dated: August 20, 2019.
Christopher M. Pilkerton,
Acting Administrator.
[FR Doc. 2019-18609 Filed 8-27-19; 8:45 am]
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