“Unfortunately, certain farm and ranch partnerships, many of which are small family run businesses, were left out of changes made to the SBA’s Paycheck Protection Program in December,” Marshall said. “Our legislation would let farmers categorized as a partnership use gross income rather than net income when applying for this COVID relief. When it comes to PPP, we must ensure no farmers or ranchers are left behind.”
Hickenlooper added, “Family farmers and ranchers have had limited ability to access the Paycheck Protection Program because of a legislative technicality. This bill fixes this oversight so that our farming and ranching communities get the help they need to get through the pandemic.”
Businesses can apply for PPP loans if they have 500 or fewer employees. The first draw of a PPP loan can go as high as $10 million, though the overall average loan is about $63,000 right now.
The big aspect of the PPP loan is that it is forgivable. SBA has already approved forgiveness on about 2.1 million loans out of 5.2 million issued so far. About $186.1 billion in the loans has been forgiven.
PPP loans are forgivable as long as 60% or more of the proceeds are spent on approved expenses, which includes self-employment compensation for sole proprietorships and single-owner limited liability corporations (LLCs) that file income taxes based on a Schedule F.
Combined, “agriculture, forestry, fishing and hunting” have received $7.1 billion on 363,100 loans since the beginning of 2021, accounting for about 4% of the PPP loan volume.
The agriculture, forestry, fishing and hunting sectors have seen loan volumes jump from 2020 when they accounted for only 149,435 loans. But, last year, that smaller pool of loan recipients received larger loans, accounting for $8.14 billion in loans in 2020.
SBA also has announced it has boosted the maximum dollar amount of the Economic Injury Disaster Loan (EIDL) from $150,000 to $500,000. SBA Administrator Isabella Casillas Guzman, just recently confirmed by the Senate, announced the agency had been receiving a lot of calls to remove the $150,000 cap.
EIDL is not a forgivable loan like the PPP, but it offers a 30-year loan to businesses at a 3.75% interest rate, and the loans can be applied for working capital or normal business costs. SBA also will defer the first payment on the loan issued in 2021 for at least 18 months after the date of the note.
More information on SBA loans can be found at https://www.sba.gov/….
Chris Clayton can be reached at Chris.Clayton@dtn.com
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