Now Available: Small Business Grant Loans to Pay Workers | 2020-03-31
The Small Business Administration on Tuesday released rules for a massive $ 349 billion forgivable loan program that aims to help businesses, including farm employers, across the country rehire or retain workers during the crisis. COVID-19.
Farms of all sizes should be eligible for the program along with other farm businesses, said Paul Neiffer, farm accountancy specialist at CliftonLarsonAllen. “If you are in business you are eligible,” he said.
The American Farm Bureau Federation also believes farms will be eligible, which was not the case with previous SBA disaster loans, but there was a last-minute effort to exclude agricultural producers. new Paycheque Protection Programsaid AFBF economist Veronica Nigh.
Under the program, businesses with fewer than 500 employees can qualify for a loan of up to $ 10 million based on their previous eight weeks of average salary, plus an additional 25% of that amount.
The SBA will cancel the loan if 75% of the proceeds are used for salary costs. Loan repayments would not begin for six months and the interest rate will be 0.5%.
The application example simply requires applicants to state, “The current economic uncertainty makes this loan application necessary to support the applicant’s ongoing operations.”
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Hospitality and food businesses with more than one location could also be eligible for the program if each location employs fewer than 500 workers, and each location would be eligible for loans, the SBA said.
The value of loans may be rather small for row crop operations which may have only a few employees. For other types of farms, including cattle ranchers and fruit and vegetable farms, this will be a big advantage, Neiffer said.
He said that for every $ 100,000 of a company’s payroll, including self-employment income, a farm or other business would qualify for a loan of about $ 21,000.
SBA Administrator Jovita Carranza said: “This unprecedented public-private partnership will help small businesses access capital quickly.”
Updated Wednesday morning with the AFBF commentary.
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