The US Department of Agriculture announced Monday that, for the first time, agriculture producers are now eligible for the Small Business Administration (SBA)’s Economic Injury Disaster Loan (EIDL) and EIDL Advance programs.
The EIDL program provides additional funding for farmers and ranchers and other agricultural businesses affected by the COVID-19 pandemic. The EIDLs offer a pot of $60 billion that provides recipients with “advance loans”, or what are essentially $10,000 grants, as well as business loans for up to $2 million.
The USDA said that all previous applications from food and agricultural businesses that had been rejected will be reactivated and re-reviewed by SBA.
In a letter to the dairy community, Dykes outlined important points agriculture producers should know about the EIDL program:
- Eligible agricultural businesses must have 500 or fewer employees.
- Loans are for working capital, i.e., to pay bills, provide payroll, etc.
- Applicants may use inventory as collateral if your loan request exceeds $25,000.
- The program offers a forgivable “advance loan” of up to $10,000 that does NOT need to be paid back. The amount of advance is determined by the number of employees—$1,000 per employee up to 10 employees or a maximum advance of $10,000. You count as 1 employee if you are self-employed. The amount will be directly deposited into your bank account.
- Loan terms are 3.75% for small businesses with terms up to 30 years and payments deferred for the first year.
“America’s farmers, ranchers, and producers need the same help that other American businesses need during this unprecedented time,” USDA Secretary Sonny Perdue said. “This significant new authority signed by President Trump will make a tremendous difference for America’s agricultural community.”
SBA’s EIDL portal has been closed since April 15. However, the agency was able to reopen the portal Monday in a limited capacity as a result of funding authorized by Congress through the Paycheck Protection Program and Healthcare Enhancement Act. The legislation, which was signed into law by President Donald a week eariler, provided additional funding for farmers and ranchers affected by the pandemic.
SBA is re-opening the loan and advance application portal to agricultural enterprises only. For agricultural producers that submitted an EIDL loan application through the streamlined application portal prior to the legislative change, SBA will move forward and process these applications without the need for re-applying. All other EIDL loan applications that were submitted prior to April 15 will be processed on a first-in, first-out basis.
For more information, visit: www.sba.gov/disaster.
