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Arguing that President Trump’s escalating trade war and failed infrastructure reform offers a raw deal for rural entrepreneurs, Democrats on two House Small Business subcommittees convened this week to advocate for greater federal investments in rural businesses.

“Today, most economic indicators show sustained growth, but rural and traditionally underserved sectors, like women and minorities continue to face challenges accessing the capital needed to start and grow successful businesses,” said Dwight Evans (D-PA), Ranking Member of Economic Growth, Tax and Capital Access. “The reasons for uneven access are many.  For one, venture capital and private equity, which helps high-growth small businesses scale up quickly, is highly concentrated and shuns most rural and underserved markets. For these reasons, it is crucial that Congress take a comprehensive approach to channel much-needed resources into underserved areas.”

“Since the Great Recession, rural America has been struggling to progress alongside metropolitan areas,” said Rep. Brad Schneider (D-IL), Ranking Member of the Subcommittee on Agriculture, Energy and Trade. “While urban businesses experience record profits and a tight job market, rural counties have yet to fully recover. In fact, more and more people are moving to urban areas for better opportunities. And, for that reason, Congress must invest in rural communities.”

Democrats stressed that financial recklessness on Wall Street forced the closure of over 1,900 small and local banks following the Great Recession, cutting off a vital source of capital for rural businesses. Compounding this obstacle, 78 percent of venture capital funding goes to three states: New York, California, and Massachusetts.

“Because of increasing debt, rising inequality, and a decline in household wealth for the average family, the number of entrepreneurs who are in a personal position to self-finance their business is in decline,” said Ross Baird, President of Village Capital. “Any attempt to reverse the decline in firm creation in America must focus on expanding access to external capital to entrepreneurs.”

The House has recently passed legislation authored by Committee Democrats to expand access to capital for rural and other disadvantaged small businesses. More broadly, Democrats are prepared to give Americans A Better Deal, by investing federal dollars in rural broadband expansion, rebuilding crumbling infrastructure and giving small firms a fair deal on trade.

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