Effective July 6, the Small Business Administration has resumed accepting Paycheck Protection Program loan applications in response to the Paycheck Protection Program Extension Act, which cleared both chambers of Congress last week.
The legislation, which was quickly approved by President Trump, extends the application period for PPP loans to Aug. 8. Originally scheduled to expire June 30, MFB National Legislative Counsel John Kran says the extension gives farmers another opportunity to apply.
Approximately $139 billion is still available for PPP loans, designed to help struggling small businesses, including farm operations, keep employees on their payrolls as they recover from the impact of COVID-19.
While some farms have already benefitted from PPP loans, many farm applications were not funded in previous rounds of enrollment — due to exceptionally high demand that quickly burned through previous funding allocations, according to Kran.
“According to SBA data, a meager 1.5% of approved funding has gone to the agriculture, forestry, fishing, and hunting sectors combined thus far,” Kran said. “American Farm Bureau Federation continues to work with Congress and the Trump administration on changes that will include more farmers.”
Some of those changes, said Kran, were included in the Paycheck Protection Program Flexibility Act of 2020, which was approved and signed by President Trump in June, giving farmers and other small-business operators more flexibility with their expenses.
“There were several key provisions for agricultural employers, including extending the PPP loan forgiveness period to include costs incurred over 24 weeks after a loan is issued rather than the original 8 weeks,” Kran said. “And to qualify for PPP loan forgiveness, the threshold amount of the loan needed to be spent on payroll was reduced from 75% to 60%.”
The bill also establishes a minimum loan maturity period of five years following an application for loan forgiveness instead of the previous SBA two-year deadline.
“Even as the economy gradually begins to reopen, farmers continue to encounter enormous volatility within the markets,” Kran said. “Producers interested in PPP should take advantage of the extra time to consult with their accountants and lender about the PPP application to ensure all the proper documentation has been completed and reviewed before meeting with their lenders.”
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.
You should consult with your local lender as to whether it is participating in the program.