Resources for Farmers & Agricultural Producers
Last month, I supported the Coronavirus Aid, Relief, and Economic Security (CARES) Act to strengthen our public health response and economic security during the COVID-19 pandemic. This bill allocated $349 billion for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The PPP provides loans to support small businesses throughout America. Below is an FAQ about the PPP for farmers and agricultural producers.
What is the Paycheck Protection Program?
The CARES Act provided $349 billion for SBA to administer the Paycheck Protection Program (PPP). The PPP will provide loans of up to $10 million to small businesses that have been harmed by the coronavirus pandemic. PPP loans may be used to cover payroll costs, healthcare benefits, mortgage interest payments, rent, utilities, and other interest payments.
To learn more, click here.
Where can I apply for a PPP loan?
You can apply for a PPP loan through your local SBA-approved lender. For a complete list of SBA-approved lenders in Virginia, please see here. You can find a sample application form here to see what information you’ll need to provide to your lender.
Are agricultural producers, farmers, and ranchers eligible for the Small Business Administration’s Paycheck Protection Program (PPP)?
Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible.
Farms are eligible if: (1) the farm has 500 or less employees, OR (2) it fits within the revenue-based sized standard, which is on average annual receipts of $1M.
Additionally, farms can qualify for PPP if it meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) a maximum net worth of the business not more than $15 million, AND (2) the average net income Federal income taxes of the business for the two full fiscal years before the date of the application be not more than $5 million.
To view the full guidance from the Treasury, please see here.
Are agricultural and other forms of cooperatives eligible for PPP?
If other eligibility requirements are met, small agricultural cooperatives may receive PPP loans. Other forms of cooperatives may be eligible provided they comply with all other Loan Program Requirements (as defined in 13 CFR 120.10).
Do H-2A or H-2B workers on my payroll count towards my eligibility and total possible loan amount?
Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of the PPP loan amount.
How do sole proprietor farmers provide accurate documentation regarding payroll, when they may not take a traditional salary?
SBA requires sole proprietors, independent contractors, and other eligible self-employed individuals to provide documentation to its lender that the business was in operation as of February 15, 2020. This documentation may include payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation to its lender, such as bank records, sufficient to demonstrate the qualifying payroll amount.
For information on foods available for purchase under the The Emergency Food Assistance Program (TEFAP), the purchasing process, and more, see here.