The House just passed the Paycheck Protection Program and Health Care Enhancement Act. The $484 billion dollar measure allocates additional funds for disbursement via the Small Business Administration. The Senate has already passed the bill. President Trump is expected to sign it. Some farmers will be able to use the PPP.
Congress has moved to allocate additional money to the Paycheck Protection Program and farmers could benefit.
Bob Rhea of the Illinois Farm Business Farm Management Association says some farmers should be able to apply for the government backed SBA loans.
“We believe farmers are eligible to participate in the PPP, the Paycheck Protection Program, under the CARES Act. They don’t specifically identify agriculture as a participating entity but in the very broad scope of things they say any eligible business with less than 500 employees is eligible to participate in the Paycheck Protection Program.”
PPP is administered through local banks and is available through Farm Credit offices. Bob Rhea says it is a loan but one that can be easily forgiven. Here’s how self-employed farmers and others would make the paycheck calculation.
“It does include a very unique forgiveness provision for a Small Business Administration loan. It is really based on eight weeks out of 52. Approximately 15% of their 2019 income is the part can be forgiven for a self-employed person. For those that are seeking loans for their payroll, it will be measured on the payroll they incur in the eight weeks on the loaned funds after they are disbursed.”
Rhea says there are a few other pieces that can be used generate the loan forgiveness provisions of the Paycheck Protection Program. These include mortgage interest, rents, and utilities costs. Seventy-five percent of the disbursed funds must be used for payroll expenses. Check with your local bank or Farm Credit office to see if your farm qualifies.
***Report Courtesy of the ILLINOIS Farm Business Farm Management***
