By Jennifer Dorsett
Field Editor
Congress voted to approve a $484 billion “phase 3.5” coronavirus relief bill that provided additional resources to small businesses and hospitals and implemented a nationwide COVID-19 testing program.
The bill replenished the Small Business Administration (SBA) Paycheck Protection Program (PPP) with an additional $310 billion and increased the authorization level of the emergency Economic Injury Disaster Loan (EIDL) program by another $60 billion ($10 billion for advance grants and $50 billion for EIDL loans). The bill also makes agricultural entities eligible for EIDL loans.
“We are very thankful to our legislators for hearing the concerns of the agricultural community and addressing them,” Texas Farm Bureau (TFB) National Legislative Director Laramie Adams said. “The Paycheck Protection Program is a lifeline for small businesses of all kinds right now, but farmers and ranchers had issues utilizing this program in the first round. We are pleased some of these issues are now addressed to help more of our hardworking farm and ranch families receive access to SBA programs.”
PPP applications for self-employed and independent contractors—which is how most farmers and ranchers are categorized—weren’t accepted until April 10, a full week after the application window was open for other businesses.
Guidance for those types of applications wasn’t released until April 14, and funding ran out less than 48 hours later.
As a result, of the more than 1.6 million loans approved, only 46,334 went to businesses in the agriculture, forestry, fishing and hunting sector, according to SBA data.
Traditionally, farmers and ranchers don’t use SBA programs, Adams explained, but instead go through the U.S. Department of Agriculture’s (USDA) Farm Service Agency for disaster relief.
Although the SBA was doing an incredible amount of work in a short amount of time, Adams said the agency was unfamiliar with the unique aspects of farming and ranching operations, such as the use of different tax forms, labor contracts instead of direct hires, seasonal employees and rent structures, including land, structures and equipment instead of a single building lease.
Adams noted community banks, Farm Credit branches and other primarily rural institutions were also unable to get approved as lenders in time, so businesses that already had relationships with lenders familiar with SBA protocols were first in line for PPP funding.
“That really left some farmers and ranchers hurting,” Adams said. “Just like any other small business, their payroll needs must still be met, and bills have to get paid. So, we’re very glad to see some more funding added to PPP.”
Additionally, SBA’s interpretation of EIDL funding initially left agricultural enterprises other than aquaculture, agricultural cooperatives and nurseries ineligible for the program. But Adams said this latest bill adds language clarifying congressional intent to include agriculture.
“Getting access to EIDL is a big deal, because that opens up additional relief to farmers and ranchers,” Adams said. “And while Congress specified the program was for any small business with less than 500 employees, it didn’t get interpreted that way, and we’re pleased to have that corrected. Any amount that can help farmers and ranchers stay afloat until the economy reopens is critically needed.”
The legislation also contains funding to continue fighting the coronavirus pandemic, including $75 billion to hospitals and an additional $25 billion to establish a nationwide viral testing protocol.