MOA works with the National Sustainable Agriculture Coalition (NSAC) to provide insight, guidance, and support to farmers and ranchers trying to navigate legislation, rules, and more and to ensure that you have the resources needed to run viable businesses and farm with integrity. We received the following information about SBA resources at this extraordinary time. Note: There is a link to a Rachel Armstrong webinar in this post. Rachel is with Farm Commons, who MOA worked with last December to host the Farm Commons’ “Cultivating Your Legally Resilient Farm” workshop.
Let MOA know what questions you have about available resources or run into roadblocks using them.
Paycheck Protection Program (PPP)
NSAC has confirmed that farmers ARE eligible for PPP loans. BUT there are some caveats. Farmers must have fewer than 500 employees and less than $1 million revenue. SBA also requires that farms and ag businesses first explore FSA loan programs (esp if they have a relationship with FSA).
Also, PPP loans cannot be used to cover payroll for foreign workers or independent contractors, and may not be that useful for small farms with very small payrolls. NSAC has also heard another possible limitation is that farms will need to show some form of compensation payment to the farm operator(s) themselves.
NSAC continues to hear that many lenders still don’t have critical info from SBA to start processing loans, and apparently some SBA field staff are still telling farmers they aren’t eligible. NSAC is trying to get SBA to issue clarity on this but if you have heard from your SBA lender that farmers are NOT eligible for PPP, please let NSAC know and send Juli Obudzinski with NSAC the name of lender and reason as well.
Additional PPP resources:
- PPP Borrowers Information Sheet
- PPP Lenders Information Sheet
- General PPP Information
- PPP Sample Loan Application
Economic Injury Disaster Loans (EIDL)
Unfortunately, things are a bit more complicated here. So far, everything NSAC has gathered is that SBA is still deeming farmers ineligible for EIDLs and the emergency EIDL grants created in the CARES Act.
Rachel Armstrong from Farm Commons does a great job explaining the legal justification for this in a webinar she did yesterday. You can download a recording here (and view the attached slides)
It comes down to the SBA regulations that codify EIDL – which explicitly exclude “agricultural enterprises” (but not ag cooperatives, nurseries, aquaculture) from being eligible for EIDLs and presumably the new emergency EIDL grants.
As many folks saw, there is pressure mounting from the hill for SBA to reverse this decision. 86 members of the House – led by Rep. Delgado (D-NY) – sent this letter to SBA yesterday urging them to ensure farmers are eligible for EIDLs and other SBA relief. And while it’s still possible that SBA could reverse its decision, we will most likely need to address this is the next relief package.
Here’s a few additional resources on PPP and EIDL:
- Agripulse article “Farms Eager for Forgivable Loans as SBA Updates Rules”