The recipients employ 10 or fewer people. Most of the businesses are service-oriented, such as hair salons, restaurants and retail outlets, said Johnathan Hladik, policy director of the Center for Rural Affairs in Lyons, Nebraska.
The Nebraska center and a coalition of small-business lenders are urging Congress to forgive up to $2 million in loan payments for six months, similar to loan relief in another SBA program funded by the CARES Act.
Rural entrepreneurs and businessowners often struggle to obtain loan financing. It took Hogman several years before an RMAP loan provided the financing he needed to purchase his business in Evanston, Wyoming.
"It's basically the reason that I exist, to put it lightly," Hogman said.
'The Entire Town Feels It'
Employment loss during the early weeks of the pandemic was about 27% among firms with fewer than 100 employees and was concentrated among low-wage workers, according to a May 6 paper from economists at the ADP Research Institute, the Federal Reserve Board and the University of Chicago.
Among private sector employment across the country, small businesses of fewer than 50 employees shed more than 6 million jobs from March to April, according to the April ADP Small Business Report. The service and goods-producing sectors shed the most. The share of jobs lost was even greater in businesses of fewer than 20 employees.
Those small businesses are especially critical to the rural economy. Operating in places with low population density, small enterprises are credited with keeping profits in the community and building local leadership. Some scholars have found that counties with greater concentrations of small, locally owned businesses even have healthier populations.
"I've lived the majority of my life in communities of less than 5,000 people, and when a business closes the entire town feels it," said Waldo Smith, director of microlending at the Wyoming Women's Business Center in Laramie.
Several reports and experts have emphasized that banks prioritized paycheck protection loans with small businesses with whom they already had a relationship, to save money and avoid fraudulent applications.