Next Wednesday, March 31, is the last day on which ag producers can file for Payroll Protection Program loans. There has been discussion in Congress to extend the deadline to May 31, but nothing has been voted on yet. To be safe, farmers and ranchers are urged to make the March deadline.
Another reason to apply early is the availability of funds. The PPP loans are part of the provisions of the CARES Act of 2020, which provides forgivable emergency loans of up to $10 million. It is administered by the Small Business Administration (SBA).
According to attorney Nick Jellum, too many farmers do not know that they are eligible for the help. Speaking to AGWeb, Jellum said: “I think there’s a misconception that you have to have employees in order to qualify, which just isn’t true. This program is aimed to help not just corporations, such as farm corporations, but also small producers such as sole proprietors, self-employed, and independent contractors. There is no minimum loan size, which is great. I’ve helped borrowers and lenders on loans as small as $500, but all the way up to the maximum loan of $10 million as well.”
The loan program was financed by Congress a year ago, which made $349 billion available to small business to help those injured by the coronavirus situation. Early on, it was not clear that small farmers were included in the “small business” category. But the rules do state that agriculture producers, farmers, and ranchers with fewer than 500 employees, with a principal residency inside the U.S. are eligible.
If you received a PPP loan in the first-round last year, you may still be eligible for a “second draw” if you qualify as one of the harder hit businesses; if you have fewer than 300 employees and can show that your sales were down at least 25% over the same period in 2019.
If you are new to PPP, you can apply through an approved SBA lender. It may be that your bank is an approved SBA source.