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Ernst urges SBA reforms to expand rural access to capital

U.S. Senator Joni Ernst says she’s asking the Small Business Administration to look into some challenges facing rural community banks.

“What we have found is that small businesses, oftentimes in the rural areas, and our farmers they really struggle to access those 7(a) loan programs,” she said. “Just excessive paperwork and continual asks.”

Ernst, who chairs the U.S. Senate Small Business Committee, says she’s sent a letter to SBA administrator Kelly Loeffler which outlines several recommendations to tailor SBA loan programs.

“What we would like to see is more of a streamlined application process so that we are utilizing these programs as they were originally intended – helping those small businesses, helping those farmers in the rural areas.”

Specifically, the letter asks the SBA to incorporate the judgment of experienced bankers who understand local market dynamics and seasonal income patterns; take into account that assets are commonly inherited or jointly owned in rural communities; and ensure greater clarity and support for community banks to avoid guaranty denials based on technicalities.

The Iowa Republican tells Brownfield many farmers and ranchers depend on small community banks.

“For young farmers as they are trying to access capital for their first farming operations, they often go to their local community bankers,” Ernst said. “They should always be our first choice out there.”

Ernst also lauded the SBA administrator for “actively working to modernize programs and expand access to capital.”

The full audio interview with Senator Ernst can be heard below: