Latest Relief Package Would Allow Ag Operations To Qualify For EIDL
Courtesy of kla.org
Congress this week approved emergency relief legislation that would deliver an additional $321 billion in funding for the Paycheck Protection Program (PPP) and $50 billion for the Economic Injury Disaster Loan (EIDL) program, both of which are provided through the Small Business Administration (SBA). The bill also included authorizing language to allow agricultural operations with less than 500 employees to qualify for EIDL. Prior to this, agricultural enterprises did not have access to the program. The president is expected to sign the legislation.
EIDL offers loans of up to $2 million that can be used to pay fixed debts, payroll, accounts payable and other bills. Funds cannot be used to refinance long-term debt, expand facilities, pay dividends or bonuses, or for relocation. If an applicant is a major source of employment, SBA may waive this statutory limit. EIDL interest rates are determined by formulas established in law and are fixed for the life of the loan, however, ceilings are statutorily set at no more than 4% per annum. These loans are offered with long-term repayments, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. Once this legislation is finalized and funding is replenished for the program, producers can apply for an EIDL advance of to $10,000, which will not have to be repaid.
As with PPP, loans provided through the EIDL program will be available on a first come, first serve basis. Those wanting to apply for PPP or EIDL should do so as soon as possible. The PPP borrower application and a link for more information on EIDL, can be found here.