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Congress Passes New Stimulus Package
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Friday, April 24, just after noon eastern time, President Trump signed into law the $484 billion Paycheck Protection Program and Health Care Enhancement Act of 2020 (PPPHCE Act), which is a follow up to the the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). PPPHCE Act passed the Senate on Tuesday, April 21 and it passed the House on Thursday, April 23.
The PPPHCE Act expands farmer eligibility for the Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) program, provides additional funding for the Paycheck Protection Program (PPP), and includes critical funding for hospitals and health care providers. The bill also clearly states agriculture enterprises are eligible for the EIDL program. Extending EIDL to agriculture enterprises provides agricultural producers a critical source of financing to help preserve their businesses and protects the nation's food supply after this pandemic is over. Farm Bureau applauds Congress for including agriculture in the EIDL eligible entities.
Congress authorized an additional $320 billion for the PPP and provides $60 billion for the EIDL program. The bill provides $75 billion to hospitals and health-care providers. It also allocates $25 billion to increase testing efforts across the country and tasks the Trump administration with creating a national plan to assist states to expand testing efforts. $600 million of funding is earmarked for Community Health Centers and $225 million for rural health clinics.
Within the $320 billion for the PPP, the bill creates a $60 billion set-aside for Insured Depository Institutions, Credit Unions, and Community Financial Institutions for the PPP. The focus on loans to businesses in underserved and rural markets is critical. Regretfully, the implementation of the CARES Act made it difficult for farmers to participate even though Congress prioritized the disbursement of loans to businesses in underserved and rural markets. These challenges explain why the agriculture, forestry, fishing, and hunting sectors combined received a meager 1.3 percent of the total approved funding and 2.8 percent of approved PPP applications, according to SBA data.
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How to Apply for PPP and EIDL
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With passage of the PPPHCE Act, farmers are now eligible for both of the major Small Business Administration (SBA) programs designed for the COVID-19 response, which are the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. This means farmers can apply for low-interest loans through the EIDL program including qualifying for an advance $10,000 emergency grant. EIDL is for entities suffering economic harm due to COVID-19. Only the SBA can process EIDL applications. However, you will need to work with a SBA approved lender to apply for the PPP.
Funding for both programs are expected to be allocated quickly. If you want to apply to either of these programs, it is vital to begin applying as quickly as possible.
EIDL
Farmers can join other small business owners and can apply for an EIDL advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid. Only the SBA can process EIDL applications. At time of publishing, SBA's website was not accepting EIDL applications because of the time required to prepare the website and passage of the PPPHCE Act. However, you are encouraged to check this link to the SBA website for EIDL application availability.
Prior to passage of the PPPHCE Act, most farmers were not eligible for the EIDL. Farm Bureau led the effort to advocate to Congress that farmers should be eligible for the EIDL. Here is the letter Farm Bureau and other organizations sent to SBA regarding EIDL and was the framework for advocating to Congress.
PPP
Farmers, self-employed individuals, and independent contractors are eligible for PPP. If you have been negatively impacted financially by the COVID-19 pandemic, we encourage you to review this option. PPP includes a "forgivable" loan if the dollars are used as intended. Farm Credit and many local banks are participating and may be able to help you. However, if you are unable to apply through a local bank or Farm Credit, Farm Bureau Bank is taking applications even if you are not a prior customer.
Farm Bureau Bank also has the capacity and expertise to help if you are unable to find a local lending source. Farm Bureau Bank is continuing to process PPP applications in order to quickly submit the information to the SBA as soon as the system is reopened for application submission, perhaps as soon as today (Friday, April 24, 2020). The demand is enormous, and we expect this round of funding to run out in a matter of days. We encourage members to act now and apply if they want access to the program.
Under the previous PPP payments, many members were challenged with accessing these funds due to huge backlogs at large national banks. Some Farm Credit banks and small community banks had difficulty obtaining SBA approval to process the loans. In addition, the slow release of guidance for the self-employed and independent contractors created problems in the first round. As a result, farmer participation in the first round of PPP was weak. Of the 20 subsectors reported by SBA, the agriculture, forestry, fishing and hunting sector had the lowest average loan approval.
Again, we don't expect the dollars to last long. So, act quickly and apply if you want access either program.
You are encouraged you to share this information with other farmers and Farm Bureau members in your county. The details of the program, as well as access to the application, are attached. Both can also be found on the TFBF website, https://www.tnfarmbureau.org/covid-19 and the Farm Bureau Bank website, www.farmbureaubank.com. Additional information is below.
Farm Bureau Bank PPP FAQ
Farm Bureau Bank PPP Application Checklist
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Governor Lee Releases Tennessee Pledge to Reopen Tennessee
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On Friday, April 24, Governor Bill Lee released his administration's reopening plan, called the "Tennessee Pledge." This pledge was developed by the administration and the Governor's Economic Recovery Group (ERC), which TFBF President Jeff Aiken was a member of the group. Rhedona Rose, Executive Vice President of TFBF, served as the chairman of the Agriculture and Food Subgroup. You can find this "Tennessee Pledge" along with other resources at this link.
The state's rollout of guidance and best practices for Tennessee businesses in 89 of 95 counties includes safeguarding protocols such as distancing, usage of face coverings, and capacity measures. The first business sectors to receive guidance through the plan include the restaurant and retail industries. Governor Lee announced yesterday that restaurants could reopen at 50% capacity on Monday and retail stores Wednesday.
"Tennesseans pulled together to flatten the curve, and it is time for people to begin to get back to work and back to their businesses," Lee said. "We are pursuing a careful, measured approach to reopening our economy that does not depend on heavy-handed mandates but instead provides practical tools for businesses of all sizes."
The state is working with Shelby, Madison, Davidson, Hamilton, Knox, and Sullivan on plans to reopen businesses in those counties. More guidance will be released next week for other industry sectors.
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