Changes recently passed by the House and Senate to the Small Business Administration’s Paycheck (SBA) Protection Program (PPP) offers farmers and ranchers more flexibility. The changes should help farmers use the program much more easily, according to American Farm Bureau Federation (AFBF) Economist Veronica Nigh.
“Under the previous version, any loan proceeds that you received had to be used within eight weeks of getting the funds. The new bill extends that period to 24 weeks,” she said. “The other thing is previously, for the loan to be forgiven, at least 75 percent of the costs had to come from payroll. The new bill lowers that threshold down to 60 percent.”
The legislation also extends the deadline to apply for PPP funds from June 30 to Dec. 31, 2020.
“It’s also important that any new loans that are made after this bill is signed into law, the amount of time you have to pay the loan back is extended from the previous two years to five years. Now, that doesn’t apply to loans that are already in effect. But the SBA and Congress certainly suggest that borrowers reach out to their lender to see if they might be able to get their payback period extended to that five years,” Nigh said.
Through the two rounds of PPP funding, Nigh said Congress has allocated roughly $670 billion for the program, with more than $120 billion still available.
“Hopefully, the flexibilities and the extensions that have been provided in the new bill will increase the share of farmers and ranchers who are utilizing the program. Because, thus far, through May 30, only 1.5 percent of the total obligated funds have been used for agriculture, forestry, fishing and hunting operations,” Nigh said.
Click here for more information on the PPP program.
For other loans and funding information, visit Texas Farm Bureau’s COVID-19 resources page.