During a three-day bus tour of Midwestern cities, President Barack Obama cited private equity as a way to stimulate job growth and investment in rural communities.
Obama announced 16 August that the Small Business Association (SBA), in conjunction with the Department of Agriculture, will launch a series of conferences nationwide to provide a platform for connecting private equity and venture capital investors with rural start-ups.
“These are tough times for a lot of Americans, including those who live in our rural communities,” Obama said during a stop in Iowa. “That's why my administration has put a special focus on helping rural families find jobs, grow their businesses and regain a sense of economic security.”
Furthermore, his administration will use “marketing teams” to go out and pitch federal grant money to private investors. These marketing teams will leverage existing personnel with expertise about rural funding sources across all federal departments and agencies.
Obama’s announcement came on the second day of his Midwest tour through Minnesota, Iowa, and Illinois. The president is travelling through the heartland to explain his economic policies to rural voters.
On 9 June, Obama signed an executive order establishing the first White House Rural Council to promote economic growth in rural America. The council is focused on increasing rural access to capital, expanding digital and physical infrastructure in rural areas, and creating economic opportunities through conservation and outdoor recreation.
Separately, the SBA recently announced the creation of a $1 billion Impact Investment Fund through its Small Business Investment Company programme. The Impact Fund will invest in distressed areas as well as in emerging sectors such as clean energy.
SBA provides up to a 2:1 match to private capital raised by this fund, partnering with private investors to target impact investments. SBA and USDA will partner together to drive $350 million of investment capital through the Impact Fund and existing SBICs into rural small businesses over the next five years, doubling the current rate of investment.