USDA launches new rural investment fund

McLarty Capital Partners will help inject $100 million into growth-oriented small businesses across rural America.

The U.S. Department of Agriculture 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 Co. (RBIC) will be the fifth RBIC that USDA has helped 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.

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

MCP, 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. MCP is uniquely positioned to support the long-term business objectives of rural American partners across the country. Its Rural Investment Fund will invest in this vital sector of the U.S. economy with the goal of ensuring that businesses located in smaller communities throughout the nation have access to the capital needed to realize their goals.

"We are pleased to partner with USDA in this innovative public/private partnership to propel and sustain small business growth in rural America," MCP co-founder McLarty said. "With roots in America's heartland, 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 announced Thursday was formed under USDA's Rural Business Investment Program, which USDA is utilizing to license funds that invest in enterprises creating growth and job opportunities in rural areas, with an emphasis on smaller enterprises. In 2014, Advantage Capital was granted a license for its $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 the Open Prairie Rural Opportunities Fund in April 2016. Additional funds are currently under review.

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

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