Rural Small Business Fairness Act of 1988

Rural Small Business Fairness Act of 1988 - Amends the Small Business Act to empower the Small Business Administration to make disaster loans to assist small business concerns in effecting the continuation of or adjustments to facilities or operation methods necessitated by Government action or by Federal requirements, law, or regulation (or derivative State or local mandates), if the SBA determines that the concern is likely to suffer substantial economic injury or be unable to market a product or service without the loan assistance. Includes as eligible for these disaster loans any rural small business or small agricultural cooperative located in a county where specified percentages of commercial cropland have been lost as a result of various acreage reduction programs under the Agricultural Act of 1949, including enrollment in the conservation reserve program.

Limits disaster loans to: (1) $200,000 ($400,000 if the recipient is determined to be a major source of employment in the county); and (2) an initial term of ten years or less. Sets the initial interest rate at two percent and provides for its progressive increase over the life of the loan.

Permits loan funds to be used to restructure existing loans or other credit costs when such modifications are necessary to offset the adverse economic impact of the Government action triggering need for the loan.

Directs the SBA, in administering the disaster loan program, to utilize, when possible, guaranteed loans originated by lenders in the county where the qualified loan recipient is located or in adjacent counties.