Recently the Department of Treasury and Small Business Administration (SBA) released an interim final rule on the Paycheck Protection Program (PPP) and agricultural producers are eligible to participate in the program. The PPP provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.
According to the rule, all businesses are eligible for a PPP loan if they have fewer than 500 employees, meet the definition of a “small business concern,” and are subject to SBA’s affiliation rules. Financial institutions, including the Farm Credit system, will be responsible for processing loan applications and administering the loan.
“We’re happy that agricultural producers were included in this program and it’s important for producers who are interested in this loan to reach out to their bankers and/or agricultural lenders to apply immediately,” said Doug Miyamoto, Director of the Wyoming Department of Agriculture. “Loans will be provided on a first-come, first-served basis so we encourage producers who are interested get the application started now.”
Along with this, loan amounts are calculated based on the payroll costs for all employees whose “principal place of residence” is in the U.S. (this definition excludes H-2A workers). The loan has a maturity of two years and an interest rate of 1% with loan payments deferred for the first six months. If at least 75% of the funds are used for payroll costs, and the remainder is used for interest on mortgages, rent, and utilities, the loan will be fully forgiven. Forgiveness is based on the employer maintaining, or quickly rehiring employees and maintaining salary level and will be reduced if full-time headcount declines, or if salaries and wages decrease.
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. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at SBA’s website.
Northern Ag Network – 2020
WY Dept. of Agriculture