COVID-19: Your Farm May be Eligible for Loan Programs

May 04, 2020


PPP - Small Business Programs

COVID-19 Alert: Paycheck Protection Program

Your farm may be eligible for short-term federal loan programs through the Small Business Administration (SBA).

In the two most recent legislative coronavirus relief packages, Congress created the Paycheck Protection Program (PPP) and broadened eligibility for the Economic Injury Disaster Loans (EIDL) administered by the Small Business Administration. Congress has confirmed that farms are eligible for both programs.

After the initial funds have run out in mid-April, Congress added billions more to each program in late April. Enrollment has already reopened so farms should still contact their financial institutions to discuss potential benefits if they have not done so already. For PPP loans, farms and businesses need to apply through a financial institution. For EIDL loans, farms and businesses apply directly to SBA online.

Here are the basics:

Paycheck Protection Program

PPP offers farms and small businesses short-term, low-interest loans to cover payroll costs, mortgage interest, rent and utilities. Loan funds used for those specific items are eligible to be forgiven if employee count and compensation are not reduced. No more than 25 percent of the forgiveness amount may be attributable to non-payroll costs.

Loan terms will be 1 percent interest and mature in two years, with payments being deferred for six months and interest accruing during that time. Amounts forgiven will not be counted as income by the lender.

Individual loan amounts are calculated according to the following steps:

  1. Aggregate payroll costs from the past 12 months for employees whose principal place of residence is the U.S.*

  2. Subtract any compensation paid to an employee who is compensated more than $100,000 a year.

  3. Divide aggregate payroll costs from Step 1 by 12 to determine your average monthly payroll costs.

  4. Multiply the average payroll costs by 2.5.

You can find additional information on the SBA’s PPP website and by contacting your financial institution to complete your application.

Emergency Economic Injury Disaster grants and loans

In addition to allocating more money to the EIDL program, the legislation allows farms and other agricultural enterprises to enroll. This change means farms would be able to apply for low-interest loans and qualify for $10,000 emergency grants.

To be eligible, a business must show economic harm as a result of the crisis. Grants are limited to $1,000 per employee with a maximum of $10,000. Loans to help overcome loss of revenue may be used to pay fixed debts, payroll and other like costs. The maximum loan is $2 million and the loans are subject to certain limitations. You can find out more information and directly apply on the SBA website.

**Fund availability and program rules subject to change.**

 

Aaron Stauffacher

Associate Director of Government Affairs, Dairy Business Assiciation, Edge Dairy Farmer Cooperative

Latest Posts

Jul 01, 2025
I hope everyone had the chance to enjoy the Independence Day holiday with family and friends. Thanks to all of you who called in your orders early and helped minimize the added pressure that the short work week brings. I’d also like to thank all of you who returned your propane contracts by the due date. With a short window of when contracts are mailed to when they are due back, we really appreciate your patience and support. If reading this reminded you that your contract is still sitting on the kitchen table, just pick up the phone and call the energy office nearest to you. Our friendly staff will be glad to take care of you. On behalf of our energy team and everyone at your cooperative, thank you for choosing us to serve your propane needs again this year.
Jun 30, 2025
I’m going to start with something most of you don’t want to hear. In 4 months, you will be firing up your furnace for the first time. In 6 months, you’ll be shoveling snow. I’m not suggesting that you should go out and buy that new snow thrower that you’ve had your eye on. However, now is a great time to buy propane for the winter.  
Jun 30, 2025
Did you know that Premier Cooperative is the largest Up North Plastics dealer in southwest Wisconsin?  Top producers know that the best way to preserve the quality of high-value forages is to store their feed in Up North silage bags.   Up North plastic has 2 to 3 times the puncture and tear resistance of foreign competitor’s products.  With the ever-increasing value of feed stuffs, why risk using anything but the strongest, most reliable, time-tested bag on the market?  Match that with Up North’s outstanding service record, and you have a combination that is unrivaled in the industry.  Trust the protection of your feed with Up North Plastics.

Related Topics