Small Business Rural Economic Development Act of 1988

Small Business Rural Economic Development Act of 1988 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to: (1) increase the emphasis on rural economic needs and the promotion of the development company program in rural areas; and (2) develop a plan to increase procurement and export trade seminars there.

Amends provisions relating to loans to State or local development companies for plant acquisition or expansion to: (1) permit up to 15 percent of any loan to be used for working capital if the small business being assisted is located in a rural area with an unemployment rate above the national average; and (2) permit the leasing of up to 33 percent of a new facility if growth projections indicate that the assisted business will both need and use the additional space provided by the new construction.

Directs the SBA to establish a pilot program to approve appropriate certified development companies located predominantly in rural areas as participating lenders in the basic small business loan program administered under the Small Business Act. Requires both interim and final SBA reports to specified congressional committees with respect to the pilot program.

Revises provisions relating to SBA guarantees of development company debentures.

Amends the Small Business Act to reduce the administrative and lending fees permitted in connection with loans in rural areas.