SBA Loan Application Deadline is Coming — Recent Changes Make Aid a Better Fit for Farmers

SBA Loan Application Deadline is Coming — Recent Changes Make Aid a Better Fit for Farmers

June 25, 2020

D’Quinton Robertson working at Lehman Farms in IA.
USDA Photo by Preston Keres

Editor’s Note: This is a guest post written by the Farmers’ Legal Action Group. Find earlier reporting from FLAG on the Paycheck Protection Program (PPP) on their website, and find NSAC’s initial reporting on PPP on our blog.

The deadline for a COVID-19 relief program that can be useful to many farmers is Tuesday, June 30, 2020. 

The Paycheck Protection Program (PPP) is run by the Small Business Administration (SBA). Farmers who have not already applied may want to consider applying for PPP, in part because recent changes to the rules may make the program more appealing to farmers.

Under PPP, self-employed people, including farmers, can receive low-interest loans that may be forgiven. The loans are fully forgiven if the farmer spends at least 60 percent of the loan money on payroll costs (including wages and certain employee benefits) over the next 24 weeks. The remainder must be spent on rent, utilities, or mortgage interest payments in order to be fully forgiven. To the extent the PPP loan is not forgiven, the interest rate is 1% and the repayment period is five years. There are no collateral requirements. In other words, even if the PPP loan is not forgiven, the loan terms are more favorable than the terms of many farm loans.

One important barrier for farmers that hope to use PPP is that the farmer must show a net farm profit on a 2019 IRS Form 1040 Schedule F. If the farmer shows a net farm loss on the 2019 Schedule F, the farmer is not eligible for PPP.

In sum, for many farmers a PPP loan can be a good option, and the deadline to apply is Tuesday, June 30, 2020. Farmers must apply through a lender.

A copy of the PPP application, as well as a list of eligible lenders making PPP loans, can be found at:

Looking for additional COVID-19 aid? Find additional resources and information on our COVID-19 resource page.

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