The Paycheck Protection Program (PPP) was just approved for a second round of low interest, forgivable loans. The loans are designed to help small business
owners pay their employees during this pandemic.
The first round of funding ran out within days. The second round is opening up today (April 27th). If you plan to apply, you should plan to do so as quickly as possible. You will apply through your bank so first make sure they’re participating, and second:
get in touch with them as soon as possible.
The application itself is pretty straightforward. I've pulled some information from the SBA website to address common questions.
Do I qualify?
According to the Small Business Administration, the following entities may be eligible:
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Any small business concern that meets SBA’s size standards (either
the industry based sized standard or the alternative size standard). Farm businesses are included in this round
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Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
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Sole proprietors, independent contractors, and self-employed persons
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Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
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500 employees, or
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That meets the SBA industry size standard if more than 500
What can I use the funds for?
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Payroll costs, including benefits;
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Interest on mortgage obligations, incurred before February 15, 2020;
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Rent, under lease agreements in force before February 15, 2020; and
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Utilities, for which service began before February 15, 2020.
Not all loan uses are forgivable. Be sure you know your intended use of the loan funds. This
article details what is and isn’t forgivable.
How do I calculate what I qualify for?
The following methodology (as detailed on the SBA website) which is one of the methodologies contained in the Act, will be most useful for many applicants.
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Step 1: Aggregate payroll costs from the last twelve months for employees whose principal place of residence is the United States.
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Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year.
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Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).
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Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.
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Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have
to be repaid).
The examples below illustrate this methodology.
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Example 1 – No employees make more than $100,000 Annual payroll: $120,000
Average monthly payroll: $10,000 Multiply by 2.5 = $25,000 Maximum loan amount is $25,000
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Example 2 – Some employees make more than $100,000 Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
Average monthly qualifying payroll: $100,000
Multiply by 2.5 = $250,000
Maximum loan amount is $250,000
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Example 3 – No employees make more than $100,000, outstanding EIDL loan of $10,000.
Annual payroll: $120,000
Average monthly payroll: $10,000 Multiply by 2.5 = $25,000
Add EIDL loan of $10,000 = $35,000 Maximum loan amount is $35,000
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Example 4 – Some employees make more than $100,000, outstanding EIDL (Economic Injury Disaster Loan Emergency Advance) loan of $10,000
Annual payroll: $1,500,000
Subtract compensation amounts in excess of an annual salary of $100,000: $1,200,000
Average monthly qualifying payroll: $100,000
Multiply by 2.5 = $250,000
Add EIDL loan of $10,000 = $260,000
Maximum loan amount is $260,000
What qualifies as a payroll cost?
Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions,
or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance
for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent
contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.
Wishing you good health and financial sustainability,
Shared by: Julia Shanks, Food Consulting
Economic Injury Disaster Loan (EIDL) program NOW AVAILABLE TO Farmers and Ranchers Affected by COVID-19
Farmers and ranchers are now eligible for Economic Injury Disaster Loans, in with signing into law the $484 billion aid package. The EIDL program
provides an emergency grant of up to $10,000 for small businesses suffering a loss of revenue because of COVID-19. Applications are submitted through the Small Business Administration. Issues with how the program has performed over the past few weeks are part
of the discussion. This is a valuable opportunity, especially for farms unable to receive a Paycheck Protection Program forgivable loan. In this webinar, we will discuss how EIDL works
with other relief options, too.
Monday, April 27th
4pm Eastern, 3pm Central, 2pm Mountain, 1pm Pacific
Register
in advance for the Monday, April 27th date at this link.
Also, the same webinar will be held on
Wednesday, April 29th
4pm Eastern, 3pm Central, 2pm Mountain, 1pm Pacific
Register
in advance for the Monday, April 29th date at this link.
After registering, you will receive a confirmation email containing information about joining the webinar. This webinar will be recorded and available on demand for those that cannot
attend or if we reach capacity: Just click the registration link at any time to watch the recording. We will also live stream the event over Facebook.
As always, be in touch with questions and issues about the legal aspects of farming during COVID-19. If you aren't familiar with Farm Commons, we are a nonprofit organization dedicated
to empowering farmers to resolve their own legal vulnerabilities within an ecosystem of support.
Check our website and
podcast for more information about farm law and COVID-19.
Thank you and best of health to everyone,
Rachel Armstrong
Founder and Executive Director
Farm
Commons
The USDA Food Box Distribution Program
USDA opened today the Request For Proposals (RFP) to bid for the USDA
Food Box Distribution Program, a
$3 billion procurement opportunity for farms, food processors, and distributors who can source, assemble, and deliver food boxes for non-profit organizations serving those in need during the pandemic. Check out
Penn State
Extension’s explanation of
details and how to apply. Go here to
download the RFP - it is due on May 1st.
The CARES Act 3.5 was made into law today (April 27, 2020) and it has two Small Business Administration programs that farmers in need should be aware
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Economic Injury Disaster Loan (EIDL)
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This program has been expanded to allow agricultural operations
with fewer than 500 employees to qualify. EIDLoffers emergency grants of up to $10,000 in cash to businesses that are losing revenue amid the coronavirus pandemic. Apply here.
Note, it might still say, “lapse in appropriations,” but once the law catches up (our sources say by Monday), you should be able to apply.
·
Paycheck Protection Program, which provides forgivable loans to small businesses (including farmers) to keep their workers on the payroll, has been replenished. Apply
quickly! The previous bill’s funding ran out in less than two weeks. You can do so through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union,
and Farm Credit System institution that is participating. You should consult with your local lender as to whether it is participating in the program. Go here for
details.
·
This link will
lead you to a resource matrix that organizes funding opportunities identified in the CARES Act and other federal resources that can help support rural America. Opportunities are categorized by customer and assistance type.
·
Small
·
Small Business Association
is offering 60-minute webinars next week on the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP):
Monday, April 27, 2020 - 9:00am EDT
Register
here
Monday, April 27, 2020 - 11:00am EDT
Register
here
Monday, April 27, 2020 - 1:00pm EDT
Register
here
Monday, April 27, 2020 - 3:00pm EDT
Register
here
Tuesday, April 28, 2020 - 9:00am EDT
Register
here
Tuesday, April 28, 2020 - 11:00am EDT
Register
here
Tuesday, April 28, 2020 - 1:00pm EDT
Register
here
Tuesday, April 28, 2020 - 3:00pm EDT
Register
here
If you had to reduce your employees’ hours due to reduction
in crop production your employees can sign on to the Work Share Program to support a portion of workers’ salaries.
If you want to keep your employees employed for part-time they can work part-time and file for compensation for the unpaid hours through the Work Share Program, part
of the COVID-19 economic package, https://www.michigan.gov/leo/0,5863,7-336-78421_97241_89981_90231_90233-352546--,00.html?utm_medium=email&utm_source=govdelivery
If you or an employee are not working due to the Coronavirus-19 that person is eligible to apply for unemployment.
Michigan has set up a system that attempts to streamline applications, based on first letter of last name. Here is the hotline phone number: 886-500-0017 and here is the website:
https://www.michigan.gov/leo/0,5863,7-336-78421_97241---,00.html
Best Health Practices for persons working on the farm
First and foremost- Be sure that any person coming on the farm is healthy. During the Coronavirus-19
crisis, as a farmer
you and your staff
are identified as ESSENTIAL in the workforce so can continue to work but you should take some precautions to minimize the risk of spreading the virus. It is up to you to figure out who will do this work and
here are some guidelines to help make that happen.
Hiring new employees is part of the farming cycle. With a seasonal production system, you may have employees who work for you for only a single growing season or even
a single crop cycle. During the COVID 19 pandemic we all need to take precautions to maintain the safety of the staff and families on the farm and those purchasing the food. Before a hired person comes to your farm there are several points you as farm manager/farm
owner/CEO should address:
What can you do if….
Any of your employees have a temperature above 98.6 F -
First, you should have several thermometers on hand and sanitary sleeves to go over the thermometer if it goes into a mouth or use thermometers that
rely on touch to the face, for safety of infecting of another person. If they have a fever, tell them they cannot work until healthy. If they have no sick leave from this job they are eligible to file for unemployment. Here is the link to file:
https://www.michigan.gov/leo/0,5863,7-336-78421_97241---,00.html
Perhaps have a team meeting with your employees to discuss how each can keep as safe as possible.
Here is a check-list of items to have on
hand to keep workers and yourself safe from Coronavirus-19 contamination:
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Face masks for each employee. Wash daily with hot water or boil in pot. If mask will be home-made use a double layer of cotton cloth such as tea towels or tight weave cotton fabric. Here is a link to plans to sew
them https://www.nytimes.com/article/how-to-make-face-mask-coronavirus.html
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Disposable gloves or rubber work gloves that are washed with bleach water between uses.
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Extra wash stations throughout work area with soap and water (does not have to be hot water) with disposable toweling.
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Spray bottles with bleach water (5 Tablespoons to 1 gallon of water) Use to spray down handles, doorknobs, hand tools, tractor cabins; then wipe dry with toweling. Workers can also wear facemasks and gloves and
carefully remove to wash (don’t touch front of mask remove at elastic/strings).
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Lunch area with chairs, bails of straw, or stools to sit on
instead of tables to allow workers to conduct social distancing (6 feet).
At the End of the Day
After each shift or at the end of the day someone with clean gloves and disposable toweling should spray the work areas, rest rooms and entry ways with the bleach water
then wipe with disposable toweling.
Do not overlook the possibility that phones can become contaminated with germs. Do not use phones with gloves as they contaminate a person with the next use.
For frequently updated information for Michigan on the Coronavirus 19 visit:
https://www.michigan.gov/coronavirus/ or call
888-535-6136. This site is updated often and also lists testing places near you.
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