SBA opens loan for farmers and ranchers
Farmers and ranchers who have been waiting for the Small Business Administration to open up more loan funding must take quick action to get their loans online.
The SBA announced Monday that it will open emergency economic disaster loan (EIDL) programs for farmers. The SBA will essentially “reopen” the lending portal for these EIDL loans, the agency said.
EIDL has been a difficult loan program for farmers since the start of the COVID-19 pandemic and the aid has been approved by Congress. In the first round of funding in early April, the SBA would not allow farmers to apply for EIDL loans. Then, at the end of April, Congress approved a new round of small business funding and specifically made it clear that farmers are allowed to apply. Yet until Monday, the SBA said there was such a backlog of EIDL loan applications that it was not accepting new applications.
EIDL loans go directly through the SBA and offer individual small business grants up to $ 10,000. But EIDL loans can be up to $ 2 million for small businesses. EIDL loans are not canceled, but EIDL allows low interest loans (3.75%) for up to 30 years. And the loans are not as limited in their use compared to other SBA emergency loans, Paycheck Protection Program (PPP) loans. EIDL also lacks the collateral requirements that small businesses and farmers might face from commercial lenders.
The USDA told DTN on Monday that farmers did not have to worry about SBA loans affecting eligibility for the agricultural program. In a brief comment, the USDA said, “Participation in the SBA’s PPP or EIDL program does not affect the eligibility of producers for the next COFOG (Coronavirus Food Assistance Program). ‘USDA. “
SBA administrator Jovita Carranza noted in a press release that for 30 years the SBA was prohibited from providing disaster assistance to agricultural businesses, but legislation passed by Congress opened these loan programs. “These long-term, low-interest loans will help maintain the viability of agricultural businesses while bringing stability to the country’s vitally important food supply chains,” Carranza said.
Since early April, farmers have faced great confusion with the SBA over the Paycheck Protection Program (PPP) and EIDL loans. The SBA has taken weeks to provide advice to farmers so they can use a Schedule F to apply for programs instead of a Schedule C, for example. PPP loans go through private lenders, but EIDL loans and grants go directly through the SBA.
The SBA will now accept EIDL’s new requests “on a limited basis only” to provide relief to farmers.
For farm businesses that have applied for an EIDL loan through the streamlined application portal prior to the legislative change, the SBA will go ahead and process those applications without the need to reapply. All other EIDL loan applications submitted before the portal stops accepting new applications on April 15 will be processed on a first-in-first-out basis.
Senator John Hoeven, RN.D., chairman of the Senate Farm Credit Committee, said farmers and ranchers with fewer than 500 employees are now eligible to apply for EIDL grants and loans.
“Access to these loans and the emergency loan advance is another important support for our farmers and herders, who continue to provide us with the food we need as we fight this pandemic,” Hoeven said. . “This is why we have been working to secure additional funding as well as the eligibility of agricultural businesses. We appreciate the SBA for working with us to implement our legislation in a timely manner and for prioritizing producer support.
Information and information on applying for EIDL loans and grants is available at https://www.sba.gov.