USDA launches new rural investment fund

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, Oct. 13, 2016 - USDA today announced the launch of a new private investment fund with the potential to inject $100 million into growth-oriented, small businesses across rural America.

The McLarty Capital Partners (MCP) Rural Business Investment Company (RBIC) will be the fifth RBIC that USDA has helped to initiate since 2014. The initiative is part of USDA's ongoing efforts to attract private sector capital to investment opportunities in rural America to help drive more economic growth in rural communities.

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"Innovative small businesses throughout rural America need the same access to capital as their urban business counterparts," Agriculture Secretary Tom Vilsack said in a release. "McLarty Capital Partners is an important ally in USDA's efforts to reenergize the rural economy, help small businesses grow and strengthen local communities."

McLarty Capital Partners, founded in 2012 by co-presidents Franklin McLarty and Christopher Smith, provides flexible financing solutions to small and medium-sized enterprises in the U.S.

"We are pleased to partner with USDA in this innovative public-private partnership to propel and sustain small business growth in rural America," Franklin McLarty said in the USDA release. "With roots in America's heartland, Franklin McLarty Capital Partners is committed to ensuring that small and medium-sized enterprises have the means necessary to achieve their business goals, and this endeavor only furthers that mission."

The new fund was formed under USDA's Rural Business Investment Program (RBIP). USDA is using RBIP to license funds that invest in enterprises creating growth and job opportunities in rural areas, with an emphasis on smaller enterprises.

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In 2014, Advantage Capital was granted a license for their $154 million Advantage Capital AgriBusiness Partners fund. The fund is making private equity investments in innovative agriculture-related businesses that support USDA's strategy for economic growth, including bio-manufacturing, local and regional food systems, advanced farming technologies and other cutting-edge fields. Since its inception in 2014, the fund has made 11 investments totaling $39 million.

Vilsack has also announced the conditional approval of other RBICs: Innova Ag Innovation and Meritus Kirchner Ventures in April 2015; and in April 2016, the Open Prairie Rural Opportunities Fund. Additional funds which are currently under review.

These efforts are part of the Made in Rural America initiative, which was created by President Obama to help rural businesses and leaders take advantage of new investment opportunities and access new markets abroad.


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